UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
Certified Shareholder Report of
Registered Management Investment Companies
Investment Company Act File Number: 811-01880
The Income Fund of America
(Exact Name of Registrant as Specified in Charter)
P.O. Box 7650, One Market, Steuart Tower
San Francisco, California 94120
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (415) 421-9360
Date of fiscal year end: July 31
Date of reporting period: July 31, 2011
Patrick F. Quan
Capital Research and Management Company
P.O. Box 7650, One Market, Steuart Tower
San Francisco, California 94120
(Name and Address of Agent for Service)
Copies to:
Michael Glazer
Bingham McCutchen LLP
355 South Grand Avenue, Suite 4400
Los Angeles, California 90071
(Counsel for the Registrant)
ITEM 1 – Reports to Stockholders
The Income Fund of America®
[photo of a basket full of vegetables]
Special feature
A flexible approach to IFA’s income objective
} See page 6
Annual report for the year ended July 31, 2011
The Income Fund of America seeks current income while secondarily striving for capital growth through investments in stocks and fixed-income securities.
This fund is one of the 33 American Funds. American Funds is one of the nation’s largest mutual fund families. For 80 years, Capital Research and Management Company,SM the American Funds adviser, has invested with a long-term focus based on thorough research and attention to risk.
Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. For current information and month-end results, visit americanfunds.com.
Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended June 30, 2011 (the most recent calendar quarter-end):
[Begin Sidebar]
Class A shares | 1 year | 5 years | 10 years | |||||||||
Reflecting 5.75% maximum sales charge | 16.14 | % | 3.00 | % | 5.68 | % |
[End Sidebar]
The total annual fund operating expense ratio was 0.58% for Class A shares as of the most recent fiscal year-end.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 29 and 30 for details.
The fund’s 30-day yield for Class A shares as of August 31, 2011, calculated in accordance with the U.S. Securities and Exchange Commission formula, was 3.73%. The fund’s distribution rate for Class A shares as of that date was 4.26%. Both reflect the 5.75% maximum sales charge. The SEC yield reflects the rate at which the fund is earning income on its current portfolio of securities while the distribution rate reflects the fund’s past dividends paid to shareholders. Accordingly, the fund’s SEC yield and distribution rate may differ.
Results for other share classes can be found on page 34.
The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. High-yield bonds are subject to greater fluctuations in value and risk of loss of income and principal than investment-grade bonds. Bond ratings, which typically range from Aaa/AAA (highest) to D (lowest), are assigned by credit rating agencies such as Moody’s, Standard & Poor’s and/or Fitch as an indication of an issuer’s creditworthiness. Investing outside the United States may be subject to additional risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries. See the prospectus and the Risk Factors section of this report for more information on these and other risks associated with investing in the fund.
Fellow investors:
For the 12 months ended July 31, 2011, The Income Fund of America (IFA) gained 14.7%. Though this return trailed the 19.6% gain of Standard & Poor’s 500 Composite Index, a broad measure of the U.S. stock market, IFA’s results significantly outpaced the 4.4% return of the bond market, as measured by the Barclays Capital U.S. Aggregate Index. The fund’s results also topped those of its income fund peers, as gauged by the Lipper Income Funds Index, which gained 10.5%.
Most fund investors have selected IFA to help them pursue long-term investing goals. Thus, even more gratifying than the fund’s one-year results are its long-term returns. As you can see in the table below, for the 10-year and lifetime periods, IFA has surpassed its key benchmarks.
Many fund investors also rely on IFA for income. This past year, the fund continued its history of providing significant quarterly dividends. Those invested for the full fiscal year received payouts totaling nearly 75 cents per share. This translates into a yield of 4.40%, more than double that of the S&P 500’s 1.90% figure, and well in excess of the 2.79% turned in by the Lipper category average.
An optimistic beginning, an unsettled end
Having weathered the tumultuous market conditions of the spring of 2010, when sovereign debt worries weighed heavily on markets, IFA began fiscal 2011 on the heels of a strong July as investors were buoyed by robust corporate profits, supportive monetary policy and improving economic indicators. After trending down again in August, markets generally rose over the remainder of the period even in the face of political upheaval in the Middle East and North Africa, and the devastating impact of the Japanese tsunami. However, late in the fiscal year debt fears resurfaced, unsettling markets; the standoff related to the raising of the U.S. debt ceiling exacerbated the uncertainty. The volatility continued after the close of the period, fueled by Standard & Poor’s downgrade of America’s credit rating on August 5.
[Begin Sidebar]
Results at a glance (with dividends reinvested or interest compounded) | ||||||||||||||||
Average annual total returns for periods ended July 31, 2011 | ||||||||||||||||
1 year | 5 years | 10 years | Lifetime1 | |||||||||||||
The Income Fund of America (Class A shares) | 14.7 | % | 3.5 | % | 6.1 | % | 11.4 | % | ||||||||
Standard & Poor’s 500 Composite Index | 19.6 | 2.4 | 2.6 | 10.5 | ||||||||||||
Lipper Income Funds Index2 | 10.5 | 4.6 | 4.7 | — | 3 | |||||||||||
Barclays Capital U.S. Aggregate Index | 4.4 | 6.6 | 5.7 | 8.2 | 4 | |||||||||||
Consumer Price Index (inflation)5 | 3.6 | 2.1 | 2.4 | 4.3 | ||||||||||||
1 Since December 1, 1973, when Capital Research and Management Company became the fund’s investment adviser. | ||||||||||||||||
2 Results of the Lipper index do not reflect the effect of sales charges, account fees or taxes. | ||||||||||||||||
3 The inception date for the index was December 31, 1988. | ||||||||||||||||
4 From December 1, 1973, through December 31, 1975, the Barclays Capital U.S. Government/Credit Index was used because the Barclays Capital U.S. Aggregate Index did not yet exist. | ||||||||||||||||
5 Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics. | ||||||||||||||||
The market indexes shown in this report are unmanaged, and their results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or taxes. |
[End Sidebar]
[photo of tomatoes hanging on a vine]
[Begin Sidebar]
In this report | |
Special feature | |
6 | A flexible approach to IFA’s income objective |
How the fund’s income-first mandate helps us navigate ever-changing market conditions. | |
Contents | |
1 | Letter to investors |
4 | The value of a long-term perspective |
12 | About your fund |
13 | The portfolio at a glance |
14 | Summary investment portfolio |
19 | Financial statements |
35 | Board of trustees and other officers |
[End Sidebar]
Broad strength; solid security selection
For the 12 months, fund results were strongly supported by some of the trends and themes so instrumental to IFA’s long-term success. These included solid security selection and a steadfast commitment to the fund’s income objective.
Results for the fund’s top-10 stock holdings (see page 13) support the stock selection assertion. Particularly strong were Philip Morris International (39.4%), Chevron (36.5%) and Royal Dutch Shell (36.1%). Indeed, of the top holdings owned for the full period, all but three outpaced the broader stock market. The laggards were Bristol-Myers Squibb (15.0%), Merck (–1.0%) and Waste Management (–7.3%).
Careful stock selection also played a crucial role in the combined returns of our financial holdings, which represented the fund’s second-largest sector concentration. This group of investments returned in excess of 10%, while financial stocks within the S&P 500 collectively gained less than 2%.
Income mandate drives us
The fund’s focused and disciplined approach to pursuing income helped returns and explained a number of the shifts in the portfolio’s composition. Take, for example, industrials companies, which led the way for the fund during its 2010 fiscal year and also posted solid returns during the most recent period. Industrials belong to a category of stocks whose dividend yields don’t always meet the fund’s income threshold, making them only periodically available to IFA. However, during the broad market downturn of 2009, solid firms in this sector were able to maintain their dividends even as their stock prices fell, triggering a rise in their yields and making them more appropriate for IFA. Judging these firms to be sound and believing they would fare well once fundamentals rather than fear drove the market, we invested. Our thesis proved correct and share prices of many of these companies rose sharply, making them solid contributors to results. Yet as their share prices increased, their yields fell. With income as our primary objective, these investments became less appropriate for the fund. Accordingly, we reduced a number of our positions over the course of the 12 months.
This pattern of price appreciation and resulting decline in yield was also present in the utilities and food, beverage and tobacco sectors and caused us to reduce our holdings in those areas during the course of the year.
If declining yields were behind a number of our portfolio reductions, rising yields drove much of our buying. In particular, we invested in a select group of European telecommunications companies with very sizable dividends and, we believe, the resources and resolve to maintain their payouts in the face of some industry headwinds. We likewise found substantial income opportunities within the pharmaceuticals sector, where we view many valuations to be below levels justified by their long-term prospects.
[Begin Sidebar]
Striking a balance between return and volatility
The Income Fund of America takes a prudent path to income. Looking back 10 years, as shown at right, the fund has provided higher returns than stocks, bonds and the average income fund and lower volatility than stocks. As this period was an unusually volatile one for equities, results for the broader stock market and the fund’s Lipper peer group lagged the broader bond market. However, IFA’s returns surpassed them all. In addition, as can be seen on page 1, the fund’s lifetime results surpass those of both the stock and bond indexes.
For the 10-year period ended July 31, 2011
[begin chart]
5 Years | 10 Years | Since 12/31/75 | ||||||||||||||||||||||
Fund | Annual Return | Annual Std Dev | Annual Return | Annual Std Dev | Annual Return | Annual Std Dev | ||||||||||||||||||
The Income Fund of America | 3.46 | 12.91 | 6.09 | 10.73 | 11.28 | 9.59 | ||||||||||||||||||
Bonds | 6.57 | 3.60 | 5.68 | 3.77 | 8.31 | 5.64 | ||||||||||||||||||
Stocks | 2.40 | 17.74 | 2.61 | 15.75 | 11.10 | 15.27 | ||||||||||||||||||
Income Funds Index | 4.58 | 8.94 | 4.75 | 7.32 |
Sources: Stocks — S&P 500; Bonds — Barclays Capital U.S. Aggregate Index; Income Funds Index — Lipper. Returns include reinvestment of all distributions. Volatility is calculated at net asset value by Lipper using annualized standard deviation (based on monthly returns), a measure of how returns over time have varied from the mean; a lower number signifies lower volatility.
[End Sidebar]
We also made investments in a handful of real estate investment trusts (REITs). In particular, we invested in specialized firms whose success we believe is tied more to the business prospects of the health care and technology industries than to commercial or residential real estate values.
Fixed income supports objectives
Yields on bonds remain very low, making them less appealing to IFA. As discussed in the feature article that begins on page 6, the fund’s income mandate enables us to direct assets toward the types of income-producing securities that have what we believe to be the most appealing risk/reward profiles. Based on those criteria, we have, broadly speaking, viewed stocks as more appealing than bonds and have been directing a greater share of assets toward them. This fact, along with a rise in the value of the fund’s equity holdings, has resulted in stocks becoming a bigger share of fund assets. That said, bonds — and especially high-yield corporate bonds — continue to play an important role in generating income for the fund, while higher rated bonds such as U.S. Treasuries continue to play a pivotal role in adding stability to the fund.
Hope amid volatile conditions
In recent weeks, worries of a global economic slowdown, debt crises affecting a number of countries, as well as Standard & Poor’s downgrade of the U.S. credit rating resulted in a highly volatile market environment. Naturally, these concerns inform our investing outlook. However, difficult economic conditions and negative investor sentiment also provide investment opportunity for the fund. In fact, we are still finding companies and issues that we believe can make solid long-term contributions to IFA.
Moreover, we believe that with its key objective of tangible return in the form of substantial quarterly income, IFA can represent a solid investment choice amid the current uncertainty and beyond.
We thank you for your continuing commitment to long-term investing.
Cordially,
/s/ Hilda L. Applbaum
Hilda L. Applbaum
Vice Chairman and Principal Executive Officer
/s/ David C. Barclay
David C. Barclay
President
September 7, 2011
For current information about the fund, visit americanfunds.com.
[Begin Sidebar]
A lifetime of high current income
The Income Fund of America’s 12-month dividend yield vs. benchmarks
Year ended July 31
[begin line chart]
Year-end | The Income Fund of America | Lipper Income Funds Average | S&P 500 | |||||||||
1/31/1975 | 7.30 | 7.34 | 4.71 | |||||||||
7/31/1975 | 7.24 | 6.98 | 4.18 | |||||||||
1/31/1976 | 6.30 | 6.53 | 3.65 | |||||||||
7/31/1976 | 7.06 | 6.54 | 3.66 | |||||||||
1/31/1977 | 6.94 | 6.30 | 4.01 | |||||||||
7/31/1977 | 6.15 | 6.26 | 4.47 | |||||||||
1/31/1978 | 6.61 | 6.83 | 5.28 | |||||||||
7/31/1978 | 6.70 | 6.68 | 4.92 | |||||||||
1/31/1979 | 7.56 | 7.07 | 5.12 | |||||||||
7/31/1979 | 7.38 | 7.04 | 5.19 | |||||||||
1/31/1980 | 7.83 | 7.36 | 4.99 | |||||||||
7/31/1980 | 7.63 | 7.37 | 4.95 | |||||||||
1/31/1981 | 8.07 | 7.95 | 4.81 | |||||||||
7/31/1981 | 8.16 | 9.57 | 4.91 | |||||||||
1/31/1982 | 8.75 | 10.55 | 5.53 | |||||||||
7/31/1982 | 9.81 | 11.02 | 6.37 | |||||||||
1/31/1983 | 7.95 | 9.22 | 4.74 | |||||||||
7/31/1983 | 7.95 | 8.42 | 4.28 | |||||||||
1/31/1984 | 7.86 | 8.50 | 4.36 | |||||||||
7/31/1984 | 8.60 | 9.37 | 4.87 | |||||||||
1/31/1985 | 7.69 | 8.57 | 4.22 | |||||||||
7/31/1985 | 7.45 | 8.22 | 4.07 | |||||||||
1/31/1986 | 7.30 | 7.71 | 3.75 | |||||||||
7/31/1986 | 7.27 | 7.34 | 3.45 | |||||||||
1/31/1987 | 6.85 | 6.70 | 3.03 | |||||||||
7/31/1987 | 7.02 | 6.66 | 2.69 | |||||||||
1/31/1988 | 7.62 | 7.11 | 3.31 | |||||||||
7/31/1988 | 6.96 | 7.40 | 3.27 | |||||||||
1/31/1989 | 6.69 | 7.40 | 3.34 | |||||||||
7/31/1989 | 6.67 | 7.31 | 3.04 | |||||||||
1/31/1990 | 6.99 | 8.06 | 3.37 | |||||||||
7/31/1990 | 7.07 | 8.02 | 3.31 | |||||||||
1/31/1991 | 8.12 | 8.82 | 3.52 | |||||||||
7/31/1991 | 7.09 | 7.76 | 3.11 | |||||||||
1/31/1992 | 6.33 | 7.01 | 2.96 | |||||||||
7/31/1992 | 6.05 | 6.45 | 2.89 | |||||||||
1/31/1993 | 6.44 | 5.86 | 2.83 | |||||||||
7/31/1993 | 6.19 | 5.25 | 2.79 | |||||||||
1/31/1994 | 5.56 | 4.90 | 2.64 | |||||||||
7/31/1994 | 6.06 | 5.06 | 2.80 | |||||||||
1/31/1995 | 6.14 | 5.53 | 2.81 | |||||||||
7/31/1995 | 5.55 | 5.19 | 2.41 | |||||||||
1/31/1996 | 5.07 | 4.86 | 2.18 | |||||||||
7/31/1996 | 5.19 | 5.00 | 2.28 | |||||||||
1/31/1997 | 5.09 | 4.56 | 1.89 | |||||||||
7/31/1997 | 4.74 | 4.31 | 1.61 | |||||||||
1/31/1998 | 4.27 | 4.43 | 1.59 | |||||||||
7/31/1998 | 4.32 | 4.32 | 1.43 | |||||||||
1/31/1999 | 4.79 | 4.14 | 1.29 | |||||||||
7/31/1999 | 4.86 | 4.34 | 1.24 | |||||||||
1/31/2000 | 5.40 | 4.81 | 1.19 | |||||||||
7/31/2000 | 5.49 | 4.93 | 1.15 | |||||||||
1/31/2001 | 4.78 | 4.88 | 1.20 | |||||||||
7/31/2001 | 4.80 | 4.69 | 1.30 | |||||||||
1/31/2002 | 5.01 | 4.24 | 1.40 | |||||||||
7/31/2002 | 5.49 | 3.96 | 1.75 | |||||||||
1/31/2003 | 5.45 | 3.69 | 1.88 | |||||||||
7/31/2003 | 4.69 | 3.35 | 1.66 | |||||||||
1/31/2004 | 4.05 | 2.79 | 1.54 | |||||||||
7/31/2004 | 3.98 | 2.73 | 1.69 | |||||||||
1/31/2005 | 3.57 | 2.50 | 1.64 | |||||||||
7/31/2005 | 3.44 | 2.46 | 1.70 | |||||||||
1/31/2006 | 3.75 | 2.72 | 1.75 | |||||||||
7/31/2006 | 3.84 | 2.79 | 1.83 | |||||||||
1/31/2007 | 4.24 | 3.03 | 1.75 | |||||||||
7/31/2007 | 4.43 | 3.12 | 1.81 | |||||||||
1/31/2008 | 4.68 | 3.61 | 2.03 | |||||||||
7/31/2008 | 5.23 | 3.90 | 2.29 | |||||||||
1/31/2009 | 6.72 | 4.51 | 3.39 | |||||||||
7/31/2009 | 5.64 | 3.81 | 2.53 | |||||||||
1/31/2010 | 4.56 | 3.17 | 2.07 | |||||||||
7/31/2010 | 4.26 | 2.90 | 2.00 | |||||||||
1/31/2011 | 4.45 | 2.80 | 1.78 | |||||||||
7/31/2011 | 4.40 | 2.79 | 1.90 |
[end line chart]
All numbers calculated by Lipper.
[End Sidebar]
The value of a long-term perspective
How a $10,000 investment has grown
There have always been reasons not to invest. If you look beyond the negative headlines, however, you will find that despite occasional stumbles, financial markets have tended to reward investors over the long term. Active management — bolstered by experience and careful research — can add even more value. As the chart below shows, over its lifetime, The Income Fund of America (IFA) has delivered higher returns than both the broader stock and bond markets. Dividends, particularly when reinvested, have accounted for a large portion of the fund’s overall results.
Average annual total returns based on a $1,000 investment | ||||||||||||
(for periods ended July 31, 2011)* | ||||||||||||
1 year | 5 years | 10 years | ||||||||||
Class A shares | 8.12 | % | 2.24 | % | 5.46 | % | ||||||
*Assumes reinvestment of all distributions and payment of the maximum 5.75% sales charge. |
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 29 and 30 for details.
Fund results shown are for Class A shares and reflect deduction of the maximum sales charge of 5.75% on the $10,000 investment.1 Thus, the net amount invested was $9,425.2 Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.
Expense ratios and turnover rates* | ||||||||
Year ended July 31, 2011 | ||||||||
The Income Fund of America | Industry average† | |||||||
Expense ratio | 0.58 | % | 1.06 | % | ||||
Portfolio turnover rate | 38 | % | 45 | % | ||||
*The expense ratio is the annual percentage of net assets used to pay fund expenses. The portfolio turnover rate is a measure of how often securities are bought and sold by a fund. | ||||||||
† Front-end load income funds, as measured by Lipper. Data as of 6/30/2011. |
[begin mountain chart]
Year End July 31 | IFA1,7,8 remaining amounts if dividends taken in cash | IFA1,4,8 with dividends reinvested | Barclays Capital U.S. Aggregate Index5,6 with interest compounded | Standard & Poor’s 500 Composite Index5 with dividends reinvested | ||||||||||||
1974# | 8,767 | 9,088 | 9,378 | 8,481 | ||||||||||||
1975 | 10,141 | 11,391 | 10,580 | 9,951 | ||||||||||||
1976 | 12,155 | 14,750 | 11,871 | 12,066 | ||||||||||||
1977 | 12,701 | 16,392 | 13,189 | 12,042 | ||||||||||||
1978 | 12,584 | 17,403 | 13,474 | 12,926 | ||||||||||||
1979 | 12,693 | 18,921 | 14,373 | 14,069 | ||||||||||||
1980 | 12,490 | 20,161 | 14,602 | 17,412 | ||||||||||||
1981 | 12,818 | 22,484 | 13,871 | 19,675 | ||||||||||||
1982 | 12,256 | 23,663 | 16,720 | 17,063 | ||||||||||||
1983 | 16,112 | 33,683 | 20,383 | 27,174 | ||||||||||||
1984 | 15,738 | 35,721 | 22,154 | 26,367 | ||||||||||||
1985 | 19,443 | 47,674 | 27,452 | 34,914 | ||||||||||||
1986 | 21,668 | 57,146 | 33,353 | 44,833 | ||||||||||||
1987 | 23,568 | 66,671 | 34,859 | 62,449 | ||||||||||||
1988 | 22,341 | 67,812 | 37,497 | 55,109 | ||||||||||||
1989 | 25,644 | 83,698 | 43,200 | 72,685 | ||||||||||||
1990 | 24,351 | 84,639 | 46,253 | 77,386 | ||||||||||||
1991 | 25,390 | 95,046 | 51,204 | 87,239 | ||||||||||||
1992 | 28,370 | 113,237 | 58,770 | 98,377 | ||||||||||||
1993 | 29,917 | 126,680 | 64,746 | 106,947 | ||||||||||||
1994 | 28,788 | 129,171 | 64,807 | 112,457 | ||||||||||||
1995 | 31,571 | 150,378 | 71,358 | 141,775 | ||||||||||||
1996 | 34,007 | 170,618 | 75,311 | 165,244 | ||||||||||||
1997 | 41,731 | 220,576 | 83,417 | 251,353 | ||||||||||||
1998 | 44,436 | 245,542 | 89,980 | 299,807 | ||||||||||||
1999 | 45,588 | 264,664 | 92,220 | 360,395 | ||||||||||||
2000 | 42,276 | 259,165 | 97,721 | 392,724 | ||||||||||||
2001 | 46,460 | 299,416 | 110,124 | 336,476 | ||||||||||||
2002 | 41,359 | 280,397 | 118,420 | 257,015 | ||||||||||||
2003 | 44,136 | 314,550 | 124,835 | 284,354 | ||||||||||||
2004 | 49,057 | 364,136 | 130,876 | 321,781 | ||||||||||||
2005 | 54,032 | 415,525 | 137,146 | 366,973 | ||||||||||||
2006 | 56,985 | 456,119 | 139,146 | 386,700 | ||||||||||||
2007 | 61,946 | 518,361 | 146,909 | 449,054 | ||||||||||||
2008 | 53,502 | 469,245 | 155,944 | 399,251 | ||||||||||||
2009 | 44,011 | 409,572 | 168,179 | 319,605 | ||||||||||||
2010 | 48,525 | 471,376 | 183,163 | 363,849 | ||||||||||||
2011 | 53,196 | 540,592 | 191,288 | 435,335 |
Year ended July 31 | 1974 | 3 | 1975 | 1976 | 1977 | 1978 | 1979 | 1980 | ||||||||||||||||||||
Value of dividends | ||||||||||||||||||||||||||||
Dividends in cash8 | $ | 343 | 734 | 859 | 781 | 843 | 937 | 952 | ||||||||||||||||||||
Dividends reinvested8 | $ | 346 | 785 | 997 | 970 | 1,117 | 1,333 | 1,463 | ||||||||||||||||||||
Value of investment | ||||||||||||||||||||||||||||
Dividends in cash8 | $ | 8,767 | 10,141 | 12,155 | 12,701 | 12,584 | 12,693 | 12,490 | ||||||||||||||||||||
Dividends reinvested8 | $ | 9,088 | 11,391 | 14,750 | 16,392 | 17,403 | 18,921 | 20,161 | ||||||||||||||||||||
IFA total return | (9.1 | )% | 25.3 | 29.5 | 11.1 | 6.2 | 8.7 | 6.6 | ||||||||||||||||||||
Year ended July 31 | 1981 | 1982 | 1983 | 1984 | 1985 | 1986 | 1987 | |||||||||||||||||||||
Value of dividends | ||||||||||||||||||||||||||||
Dividends in cash8 | 1,046 | 1,202 | 1,280 | 1,344 | 1,438 | 1,550 | 1,636 | |||||||||||||||||||||
Dividends reinvested8 | 1,743 | 2,187 | 2,548 | 2,895 | 3,365 | 3,909 | 4,431 | |||||||||||||||||||||
Value of investment | ||||||||||||||||||||||||||||
Dividends in cash8 | 12,818 | 12,256 | 16,112 | 15,738 | 19,443 | 21,668 | 23,568 | |||||||||||||||||||||
Dividends reinvested8 | 22,484 | 23,663 | 33,683 | 35,721 | 47,674 | 57,146 | 66,671 | |||||||||||||||||||||
IFA total return | 11.5 | 5.2 | 42.3 | 6.0 | 33.5 | 19.9 | 16.7 | |||||||||||||||||||||
Year ended July 31 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993 | 1994 | |||||||||||||||||||||
Value of dividends | ||||||||||||||||||||||||||||
Dividends in cash8 | 1,542 | 1,710 | 1,577 | 1,764 | 1,715 | 1,713 | 1,727 | |||||||||||||||||||||
Dividends reinvested8 | 4,479 | 5,337 | 5,269 | 6,311 | 6,579 | 6,995 | 7,471 | |||||||||||||||||||||
Value of investment | ||||||||||||||||||||||||||||
Dividends in cash8 | 22,341 | 25,644 | 24,351 | 25,390 | 28,370 | 29,917 | 28,788 | |||||||||||||||||||||
Dividends reinvested8 | 67,812 | 83,698 | 84,639 | 95,046 | 113,237 | 126,680 | 129,171 | |||||||||||||||||||||
IFA total return | 1.7 | 23.4 | 1.1 | 12.3 | 19.1 | 11.9 | 2.0 | |||||||||||||||||||||
Year ended July 31 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | |||||||||||||||||||||
Value of dividends | ||||||||||||||||||||||||||||
Dividends in cash8 | 1,752 | 1,766 | 1,968 | 1,959 | 2,210 | 2,320 | 2,226 | |||||||||||||||||||||
Dividends reinvested8 | 8,046 | 8,581 | 10,074 | 10,530 | 12,446 | 13,740 | 13,913 | |||||||||||||||||||||
Value of investment | ||||||||||||||||||||||||||||
Dividends in cash8 | 31,571 | 34,007 | 41,731 | 44,436 | 45,588 | 42,276 | 46,460 | |||||||||||||||||||||
Dividends reinvested8 | 150,378 | 170,618 | 220,576 | 245,542 | 264,664 | 259,165 | 299,416 | |||||||||||||||||||||
IFA total return | 16.4 | 13.5 | 29.3 | 11.3 | 7.8 | (2.1 | ) | 15.5 | ||||||||||||||||||||
Year ended July 31 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | |||||||||||||||||||||
Value of dividends | ||||||||||||||||||||||||||||
Dividends in cash8 | 2,272 | 2,071 | 1,944 | 1,850 | 2,180 | 2,728 | 2,784 | |||||||||||||||||||||
Dividends reinvested8 | 14,927 | 14,311 | 14,072 | 13,921 | 17,020 | 22,200 | 23,692 | |||||||||||||||||||||
Value of investment | ||||||||||||||||||||||||||||
Dividends in cash8 | 41,359 | 44,136 | 49,057 | 54,032 | 56,985 | 61,946 | 53,502 | |||||||||||||||||||||
Dividends reinvested8 | 280,397 | 314,550 | 364,136 | 415,525 | 456,119 | 518,361 | 469,245 | |||||||||||||||||||||
IFA total return | (6.4 | ) | 12.2 | 15.8 | 14.1 | 9.8 | 13.6 | (9.5 | ) | |||||||||||||||||||
Year ended July 31 | 2009 | 2010 | 2011 | |||||||||||||||||||||||||
Value of dividends | ||||||||||||||||||||||||||||
Dividends in cash8 | 2,483 | 2,069 | 2,343 | Average | ||||||||||||||||||||||||
Dividends reinvested8 | 22,231 | 19,569 | 23,154 | annual total | ||||||||||||||||||||||||
return for | ||||||||||||||||||||||||||||
Value of investment | fund’s | |||||||||||||||||||||||||||
Dividends in cash8 | 44,011 | 48,525 | 53,196 | lifetime: | ||||||||||||||||||||||||
Dividends reinvested8 | 409,572 | 471,376 | 540,592 | 11.2 | %1 | |||||||||||||||||||||||
IFA total return | (12.7 | ) | 15.1 | 14.7 |
1As outlined in the prospectus, the sales charge is reduced for accounts (and aggregated investments) of $25,000 or more and is eliminated for purchases of $1 million or more. There is no sales charge on dividends or capital gain distributions that are reinvested in additional shares. |
2The maximum initial sales charge was 8.5% prior to July 1, 1988. |
3For the period December 1, 1973 (when Capital Research and Management Company became the fund’s investment adviser), through July 31, 1974. |
4Includes reinvested dividends of $332,960 and reinvested capital gain distributions of $131,223. |
5The market indexes are unmanaged, and their results include invested distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or taxes. |
6From December 1, 1973, through December 31, 1975, the Barclays Capital U.S. Government/Credit Index was used because the Barclays Capital U.S. Aggregate Index did not yet exist. |
7Includes capital gain distributions of $24,067, but does not reflect income dividends of $63,617 taken in cash. |
8From April 1990 to September 1994, and from September 2003 to March 2009, the fund accrued dividends daily but paid quarterly. Dividends reflect quarterly dividends actually paid during the period, while year-end values are adjusted for cumulative dividends accrued but not yet paid. |
The results shown are before taxes on fund distributions and sale of fund shares.
[Begin Pull Quote]
“In IFA, we are focused not on a specific asset class like stocks or bonds, but rather on income.”
– David Barclay
[End Pull Quote]
[photo of carrots and beets in a bowl]
A flexible approach to IFA’s income objective
The Income Fund of America’s (IFA’s) mandate is clear: seek current income for fund shareholders. The fund pursues this goal through investments in a diverse combination of income-producing securities including stocks and bonds, as well as convertible and preferred securities.
From year to year and one market cycle to the next, the portfolio’s composition evolves based on a variety of factors, including the economic environment, the investing climate and the risk/reward profiles of income-producing asset classes. To help its investment professionals navigate the ever-changing risks and conditions of the global economy, the fund offers them a crucial tool: flexibility.
In the following pages, we’ll learn more about what that flexibility looks like, how it facilitates the fund’s pursuit of income and why The Income Fund of America’s global research resources allow counselors and analysts to confidently pursue its approach to delivering income.
The income mandate leads the way
Seeking regular quarterly income may seem like a straightforward proposition, but there are many paths investors can follow in pursuit of this goal. Fund president David Barclay, who is also one of IFA’s bond portfolio counselors, explains: “In a bond fund, we know the income range offered by the market, and we aim to invest in what we believe to be the best opportunities within the bond universe. In IFA, we are focused not on a specific asset class like stocks or bonds, but rather on income. With that goal in mind, we look across the spectrum of income-producing securities and build a portfolio that can deliver the desired dividends to fund investors. That can mean investing in stocks and bonds, as well as convertible and preferred securities.”
“IFA’s income objective is always top-of-mind and it drives our strategy,” explains Hilda Applbaum, the fund’s vice chairman and one of its portfolio counselors. “It naturally leads us to certain areas of the market. Some of those areas are income-producing stalwarts, such as utility stocks or high-yield bonds, but other opportunities arise from industry or market dynamics — for example, a sector where companies are initiating dividends or where yields are rising due to falling prices. Whatever the situation, heightened income is a flag that says to us ‘Research me further.’ ”
Flexibility supports key objectives
For a fund that seeks to tap into income opportunities across a shifting investment landscape, flexibility is crucial.
“In IFA, we really recognize the importance of looking at the whole capital structure (to investment professionals, the capital structure represents the different ways of investing in a company and may include stocks, bonds, convertible and preferred securities) and determining where, from a risk/reward standpoint, it makes the most sense to invest,” says equity portfolio counselor Steve Watson. “And flexibility is essential to this process.”
Adds David: “We often will look at things on an industry basis. For example, we may look across the capital structure and conclude that the stocks in a particular industry generally look more attractive than the bonds, or perhaps the opposite is true and we find that the bonds seem to be a better value than the stocks. Then we take a company-by-company approach to actually building the portfolio. We are fortunate to have the flexibility to pursue the fund’s income mandate in a way that we believe makes the most sense for investors.”
This flexibility to look across the capital structure can be particularly useful during volatile periods. This was the case during the recent global economic crisis, when many equity counselors saw attractive investment opportunities in the bonds of companies in which they had owned stock. These were companies that counselors believed would survive the crisis and had the wherewithal to meet their debt obligations. Yet, prices for bonds issued by many of these firms had fallen and featured double-digit yields.
Relying on their knowledge of the issuing companies, many of the fund’s equity counselors invested in bonds during this period. In many cases, the flexibility to invest in these bonds provided fund investors with both substantial income and capital appreciation in the period that followed.
Adds Hilda: “The more well-thought-out choices you have, the better chance you have of capturing yield in an effective and risk-sensitive way. If the only option you have when you grow concerned is to move within the same asset class or sell everything and hold cash, it can be very limiting from an income, risk and return standpoint.”
The fund’s historical asset mix (see page 9) testifies to the fact that over time, the investment landscape coupled with IFA’s income mandate has driven shifts within the fund’s portfolio.
[photo of a vegetable garden]
Research facilitates thoughtful action
While rising yield certainly draws the attention of investment professionals, understanding what’s causing the rise in yield is crucial. That’s where research comes in.
“When companies from a particular sector or bonds from a specific country or region are coming onto the ‘yield radar screen,’ that’s a sign we should be paying more attention to determine what forces are at work,” says Jody Jonsson, an equity portfolio counselor based in London.
Many things can spur such yield changes: a sector experiencing a cyclical downturn, a shift in an industry’s view of dividends, or a changing dividend trend within a particular region. Companies that have fallen out of favor with the broader market and whose stock prices have suffered also belong to this category. With respect to all the causes of higher yield, but especially the latter, research is essential to separating the wheat — solid companies experiencing short-term setbacks — from the chaff — companies with serious problems and less certain futures.
“The fund’s research is deep, global and integrated,” explains Hilda. “We have access to each other’s research work, we often travel together to visit with companies and their managers, and we are constantly exchanging ideas. For IFA, these insights are essential because, based on our income mandate, we are often operating in downtrodden areas of the market.”
“The research process helps us to identify real opportunities and, hopefully, to avoid those situations where a dividend is a sign of weakness rather than strength,” says equity portfolio counselor Andrew Suzman.
“Our research effort is sweeping. It’s global and reaches across the market capitalization spectrum, including large multinationals as well as smaller companies,’’ explains Jody. “And, importantly, our research cuts across asset classes, which encourages collaboration between stock and bond analysts. The ability to look at companies in this way is very valuable.’’
The depth and scale of IFA’s research actually facilitates the fund’s flexible approach to generating income. “It takes considerable resources to cover the range of companies and issuers that constitute IFA’s investment universe,” explains Andrew. “But in order to act with conviction when an often-narrow investment window opens, it’s essential to know those companies and issuers well.”
Explains David: “Because of our scale, when a stock or bond’s yield draws our attention, there’s a good chance that someone within our organization is up to speed on the company or issuer and we can make educated and timely decisions about investing.”
“Even when an industry or company is not eligible based on yield, there is research being done that we can tap into when appropriate,” adds Hilda. “When opportunity arises, it’s generally not the first time we’ve seen or heard about the company and its business. We have laid the ground work and are primed to take advantage.”
A global footprint; a global portfolio
If, in IFA’s case, flexibility is defined as the ability to choose from an expansive set of income-producing securities, the fund has another factor working in its favor: the global reach of its investment adviser, Capital Research and Management Company.
[Begin Sidebar]
The consistent objective, a changing portfolio
Driven by the fund’s income objective, the men and women who manage IFA seek a mix of investments they believe features the best combination of risk and reward. A flexible mandate enables them to pursue that goal through investments in a variety of asset classes. A look at the evolution of IFA’s portfolio over the past decade shows that approach in action.
Percentage of holdings as of ... | ||||||||||||||||||||||||
7/31/02 | 7/31/03 | 7/31/04 | 7/31/05 | 7/31/06 | 7/31/07 | |||||||||||||||||||
U.S. equity | 44.1 | % | 46.4 | % | 49.8 | % | 52.4 | % | 53.0 | % | 49.2 | % | ||||||||||||
Non-U.S. equity | 13.7 | 17.0 | 18.7 | 17.2 | 17.5 | 18.0 | ||||||||||||||||||
U.S. fixed income | 23.1 | 27.1 | 20.9 | 18.8 | 18.9 | 20.6 | ||||||||||||||||||
Non-U.S. fixed income | 4.5 | 4.8 | 3.0 | 4.0 | 3.8 | 3.7 | ||||||||||||||||||
Cash & equivalents | 14.6 | 4.7 | 7.6 | 7.6 | 6.8 | 8.5 | ||||||||||||||||||
7/31/08 | 7/31/09 | 7/31/10 | 7/31/11 | |||||||||||||||||||||
U.S. equity | 45.1 | % | 40.8 | % | 43.9 | % | 44.3 | % | ||||||||||||||||
Non-U.S. equity | 18.1 | 18.9 | 19.8 | 20.5 | ||||||||||||||||||||
U.S. fixed income | 23.2 | 30.1 | 27.3 | 25.7 | ||||||||||||||||||||
Non-U.S. fixed income | 4.5 | 5.8 | 4.5 | 4.8 | ||||||||||||||||||||
Cash & equivalents | 9.1 | 4.4 | 4.5 | 4.7 |
[End Sidebar]
[photo of beets growing in a garden]
[Begin Sidebar]
Experience and geographic diversity
The men and women who manage The Income Fund of America average 29 years of investment experience and are located in six different offices worldwide. The combination of global reach and seasoned perspectives expands and enhances the search for solid, income-producing companies and issuers.
[Begin Photo Caption]
[photo of Hilda Applbaum]
Hilda Applbaum
San Francisco
24 years
[End Photo Caption]
[Begin Photo Caption]
[photo of David Barclay]
David Barclay
Los Angeles
29 years
[End Photo Caption]
[Begin Photo Caption]
[photo of Grant Cambridge]
Grant Cambridge
Los Angeles
18 years
[End Photo Caption]
[Begin Photo Caption]
[photo of Abner Goldstine]
Abner Goldstine
Los Angeles
59 years
[End Photo Caption]
[Begin Photo Caption]
[photo of Jody Jonsson]
Jody Jonsson
London
22 years
[End Photo Caption]
[Begin Photo Caption]
[photo of Jim Mulally]
Jim Mulally
Los Angeles
35 years
[End Photo Caption]
[Begin Photo Caption]
[photo of Dina Perry]
Dina Perry
Washington, D.C.
33 years
[End Photo Caption]
[Begin Photo Caption]
[photo of John Smet]
John Smet
Los Angeles
29 years
[End Photo Caption]
[Begin Photo Caption]
[photo of Andrew Suzman]
Andrew Suzman
New York
18 years
[End Photo Caption]
[Begin Photo Caption]
[photo of Steve Watson]
Steve Watson
Hong Kong
23 years
[End Photo Caption]
Years of investment experience shown as of June 30, 2011.
[End Sidebar]
“Because there are many more companies that pay dividends outside the United States than within, in order to optimize income, you must be global,” says Andrew. “We have portfolio counselors and research analysts located around the world, from Los Angeles to Geneva to Singapore, and we are able to invest a significant share of fund assets in companies domiciled beyond our shores.”
Indeed, this global orientation can be seen in the geographic distribution of the fund’s equity portfolio counselors, all of whom are located in different cities. “Naturally, the people, resources and companies you are exposed to will differ based on where you live,” notes Hilda. “And having portfolio counselors located around the world expands the number of companies and issuers with which we are familiar and comfortable.”
Yet having a global investment presence does more than put investment professionals closer to companies and issuers located abroad; it actually enriches all investing discussions.
“Our global outlook coupled with the geographic diversity of IFA’s investment professionals necessarily ‘globalizes’ all our discussions,” notes Steve, who is based in Hong Kong. “We’re not going to talk about American auto manufacturers without someone offering a point of view on Korean, Japanese or European producers. Given the interconnected nature of the world economy, that’s crucial.”
[Begin Pull Quote]
“By pursuing the fund’s income objective through a mixture of stocks and bonds, investors who stay the course gain access to a broad set of opportunities that has produced solid results over time.”
– Andrew Suzman
[End Pull Quote]
[photo of baskets filled with fruits and vegetables]
These varied global perspectives can be particularly important during tumultuous economic and market periods. For example, during the current European debt crisis, fund analysts and portfolio counselors stationed in Asia have provided their colleagues with insight useful to evaluating the environment, as Asia has suffered similar debt-related issues in the past.
Flexible approach, consistent results
As evident in IFA’s long-term results, an investment strategy centered on tangible return in the form of substantial quarterly income has historically helped long-term investors pursue key investing objectives.
“We learned during the financial crisis that investing for income is not a magic bullet,” notes Andrew. “But by pursuing the fund’s income objective through a mixture of stocks and bonds, investors who stay the course gain access to a broad set of opportunities that has produced solid results over time.”
“Taking our flexible approach to IFA’s income objective requires considerable resources,” Hilda acknowledges. “Yet over the long term, utilizing our excellent research network, investing for income, striking a good balance between risk and reward and remaining flexible and adjusting to various market opportunities has been an effective investment approach for shareholders.” n
About your fund
Fund results shown are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.
Resilience during stock declines | The Income Fund of America (IFA) vs. the S&P 500 during market declines* | |||||||||||
Dates of decline | S&P 500 | IFA advantage | ||||||||||
cumulative | IFA cumulative | (percentage | ||||||||||
total return | total return | points) | ||||||||||
September 21, 1976, through March 6, 1978 | –13.5 | % | 1.9 | % | 15.4 | % | ||||||
November 28, 1980, through August 12, 1982 | –20.2 | 19.0 | 39.2 | |||||||||
August 25 through December 4, 1987 | –32.8 | –13.6 | 19.2 | |||||||||
July 16 through October 11, 1990 | –19.2 | –10.2 | 9.0 | |||||||||
July 17 through August 31, 1998 | –19.1 | –9.5 | 9.6 | |||||||||
March 24, 2000, through October 9, 2002 | –47.4 | 0.7 | 48.1 | |||||||||
October 9, 2007, through March 9, 2009 | –55.2 | –43.5 | 11.7 | |||||||||
April 29 through August 8, 2011 | –17.5 | –11.4 | 6.1 |
*Periods show S&P 500 price declines of 15% or greater (without dividends reinvested) based on 100% recovery after each decline (except for 1976–1978 and 2007–2009 declines, which recovered 78% and 77%, respectively). With respect to the most recent decline, the market has not returned to its high, reached in April 2011, and the decline may not be over. Nonetheless, we have elected to include the period to give investors a sense of how IFA’s results compared with those of the broader stock market during this tumultuous time. S&P 500 total returns, which include reinvestment of all distributions, may be higher. The index is unmanaged.
Withdrawing income: the dividend advantage
Most fund investors reinvest their dividends, but some use dividends to meet current expenses. As the charts below show, the fund’s income has allowed withdrawals to be made without invading principal.
Higher dividends ......
[begin bar chart]
Dividends produced | ||||
IFA | 1,777,770 | |||
S&P 500 | 457,178 |
[end bar chart]
...... have helped to keep principal
intact, letting compounding do
its work.
[begin bar chart]
IFA | S&P 500 | |||||||
Amount withdrawn | 508,141 | 508,141 | ||||||
Ending value | 2,469,385 | 1,156,359 | ||||||
Initial investment | 100,000 | 100,000 |
[end bar chart]
Charts show hypothetical $100,000 investments in the fund (at net asset value) and the S&P 500 from January 1, 1974, to July 31, 2011. Example assumes an annual withdrawal equaling 5% of the initial investment, increased by 5% annually. The first withdrawal, on December 31, 1974, was $5,000. Over the period, total withdrawals from each of the fund and the index come to $508,141.
Historical benefits of income
This chart shows one-year snapshots of the annual income produced by three hypothetical $10,000 investments made on July 31, 1974, in each of The Income Fund of America, the S&P 500, and three-month certificates of deposit (CDs). Over the past 37 years, income from the fund has been substantially higher.
Year ended July 31
[begin bar chart]
The Income Fund of America | S&P 500 | CDs | ||||||||||
7/31/1975 | $ | 864 | $ | 479 | $ | 924 | ||||||
7/31/1976 | $ | 1,097 | $ | 511 | $ | 652 | ||||||
7/31/1977 | $ | 1,067 | $ | 617 | $ | 598 | ||||||
7/31/1978 | $ | 1,229 | $ | 728 | $ | 814 | ||||||
7/31/1979 | $ | 1,467 | $ | 838 | $ | 1,283 | ||||||
7/31/1980 | $ | 1,610 | $ | 980 | $ | 1,998 | ||||||
7/31/1981 | $ | 1,918 | $ | 1,110 | $ | 2,302 | ||||||
7/31/1982 | $ | 2,407 | $ | 1,241 | $ | 3,003 | ||||||
7/31/1983 | $ | 2,804 | $ | 1,339 | $ | 2,235 | ||||||
7/31/1984 | $ | 3,186 | $ | 1,477 | $ | 2,376 | ||||||
7/31/1985 | $ | 3,702 | $ | 1,637 | $ | 2,617 | ||||||
7/31/1986 | $ | 4,301 | $ | 1,788 | $ | 2,217 | ||||||
7/31/1987 | $ | 4,877 | $ | 1,948 | $ | 1,940 | ||||||
7/31/1988 | $ | 4,930 | $ | 2,084 | $ | 2,417 | ||||||
7/31/1989 | $ | 5,874 | $ | 2,555 | $ | 3,240 | ||||||
7/31/1990 | $ | 6,340 | $ | 2,969 | $ | 3,382 | ||||||
7/31/1991 | $ | 7,140 | $ | 3,140 | $ | 3,171 | ||||||
7/31/1992 | $ | 7,299 | $ | 3,302 | $ | 2,226 | ||||||
7/31/1993 | $ | 7,837 | $ | 3,469 | $ | 1,548 | ||||||
7/31/1994 | $ | 8,341 | $ | 3,658 | $ | 1,680 | ||||||
7/31/1995 | $ | 8,080 | $ | 3,963 | $ | 2,920 | ||||||
7/31/1996 | $ | 9,462 | $ | 4,388 | $ | 3,049 | ||||||
7/31/1997 | $ | 11,108 | $ | 4,713 | $ | 3,189 | ||||||
7/31/1998 | $ | 11,612 | $ | 4,955 | $ | 3,414 | ||||||
7/31/1999 | $ | 13,724 | $ | 5,236 | $ | 3,313 | ||||||
7/31/2000 | $ | 15,151 | $ | 5,333 | $ | 4,011 | ||||||
7/31/2001 | $ | 15,341 | $ | 5,130 | $ | 4,233 | ||||||
7/31/2002 | $ | 16,460 | $ | 5,265 | $ | 1,806 | ||||||
7/31/2003 | $ | 15,781 | $ | 5,526 | $ | 1,164 | ||||||
7/31/2004 | $ | 17,021 | $ | 6,344 | $ | 837 | ||||||
7/31/2005 | $ | 15,588 | $ | 7,290 | $ | 1,844 | ||||||
7/31/2006 | $ | 19,236 | $ | 8,261 | $ | 3,532 | ||||||
7/31/2007 | $ | 24,953 | $ | 9,483 | $ | 4,586 | ||||||
7/31/2008 | $ | 26,672 | $ | 10,663 | $ | 3,842 | ||||||
7/31/2009 | $ | 21,965 | $ | 9,403 | $ | 2,098 | ||||||
7/31/2010 | $ | 21,582 | $ | 8,491 | $ | 258 | ||||||
7/31/2011 | $ | 25,536 | $ | 9,668 | $ | 284 |
[end bar chart]
All results are calculated at net asset value with dividends and capital gains (where applicable) reinvested. Source for CDs is the Federal Reserve. CD income assumes reinvestment of both principal and interest at prevailing rates at the time of purchase. CDs are guaranteed; the fund is not.
The portfolio at a glance
The following summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.
[begin pie chart]
Investment mix by security type | July 31, 2011 | |||
U.S. common stocks | 42.6 | % | ||
Common stocks of issuers outside the U.S. | 20.5 | |||
U. S. Treasury & agency bonds & notes | 3.6 | |||
Convertible securities, preferred stocks & warrants | 1.7 | |||
Other fixed-income securities | 26.9 | |||
Short-term securities & other assets less liabilities | 4.7 |
[end pie chart]
Five largest sectors in common stock holdings | Percent | |||
of net | ||||
assets | ||||
Industrials | 8.3 | % | ||
Financials | 7.0 | |||
Consumer staples | 6.9 | |||
Energy | 6.7 | |||
Health care | 6.4 |
Ten largest common stock holdings | Percent | |||
of net | ||||
assets | ||||
Verizon | 2.4 | % | ||
Bristol-Myers Squibb | 2.1 | |||
Royal Dutch Shell | 1.9 | |||
Merck | 1.9 | |||
Home Depot | 1.7 | |||
Chevron | 1.6 | |||
Philip Morris International | 1.3 | |||
Waste Management | 1.3 | |||
DuPont | 1.3 | |||
General Electric | 1.3 |
Country diversification | Percent | |||
of net | ||||
assets | ||||
United States | 70.0 | % | ||
Euro zone* | 7.5 | |||
United Kingdom | 6.6 | |||
Canada | 2.7 | |||
Australia | 2.0 | |||
Switzerland | 0.9 | |||
Other countries | 5.6 | |||
Short-term securities & other assets less liabilities | 4.7 | |||
*Countries using the euro as a common currency; those represented in the fund's portfolio are Belgium, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain. |
[begin pie chart]
Investment mix by security type | July 31, 2010 | |||
U.S. common stocks | 42.1 | % | ||
Common stocks of issuers outside the U.S. | 18.6 | |||
U. S. Treasury & agency bonds & notes | 5.7 | |||
Convertible securities & preferred stocks | 3.0 | |||
Other fixed-income securities | 26.1 | |||
Short-term securities & other assets less liabilities | 4.5 |
[end pie chart]
Five largest sectors in common stock holdings | Percent | |||
of net | ||||
assets | ||||
Industrials | 8.3 | % | ||
Consumer staples | 7.1 | |||
Financials | 6.9 | |||
Utilities | 6.8 | |||
Health care | 5.7 |
Ten largest common stock holdings | Percent | |||
of net | ||||
assets | ||||
Merck | 2.2 | % | ||
Verizon | 2.0 | |||
Home Depot | 1.5 | |||
Waste Management | 1.5 | |||
Chevron | 1.4 | |||
Bristol-Myers Squibb | 1.4 | |||
Royal Dutch Shell | 1.4 | |||
McDonald's | 1.3 | |||
Philip Morris International | 1.2 | |||
Emerson Electric | 1.2 |
Country diversification | Percent | |||
of net | ||||
assets | ||||
United States | 71.2 | % | ||
Euro zone† | 9.0 | |||
United Kingdom | 5.1 | |||
Canada | 2.1 | |||
Australia | 2.0 | |||
Japan | 0.9 | |||
Other countries | 5.2 | |||
Short-term securities & other assets less liabilities | 4.5 | |||
†Countries using the euro as a common currency; those represented in the fund's portfolio are Austria, Belgium, France, Germany, Greece, Ireland, Italy, the Netherlands and Spain. |
Summary investment portfolio
July 31, 2011
Percent | ||||||||||||
Value | of net | |||||||||||
Common stocks - 63.14% | Shares | (000 | ) | assets | ||||||||
Industrials - 8.28% | ||||||||||||
Waste Management, Inc. (1) | 28,115,000 | $ | 885,341 | 1.29 | ||||||||
General Electric Co. | 48,950,000 | 876,695 | 1.27 | |||||||||
Lockheed Martin Corp. | 9,107,400 | 689,703 | 1.00 | |||||||||
Schneider Electric SA | 2,671,803 | 388,326 | .56 | |||||||||
Norfolk Southern Corp. | 4,000,000 | 302,800 | .44 | |||||||||
United Technologies Corp. | 3,608,000 | 298,887 | .44 | |||||||||
Other securities | 2,258,507 | 3.28 | ||||||||||
5,700,259 | 8.28 | |||||||||||
Financials - 7.02% | ||||||||||||
HCP, Inc. | 17,675,800 | 649,232 | .94 | |||||||||
Weyerhaeuser Co. | 26,212,881 | 523,995 | .76 | |||||||||
Equity Residential, shares of beneficial interest | 7,142,800 | 441,568 | .64 | |||||||||
Digital Realty Trust, Inc. (1) | 5,790,000 | 354,406 | .52 | |||||||||
Bank of Nova Scotia | 5,265,000 | 298,558 | .43 | |||||||||
Other securities | 2,567,862 | 3.73 | ||||||||||
4,835,621 | 7.02 | |||||||||||
Consumer staples - 6.91% | ||||||||||||
Philip Morris International Inc. | 12,895,000 | 917,737 | 1.33 | |||||||||
Kraft Foods Inc., Class A | 21,000,821 | 722,008 | 1.05 | |||||||||
Unilever NV, depository receipts | 9,295,000 | 302,513 | ||||||||||
Unilever NV (New York registered) | 5,051,750 | 164,081 | .68 | |||||||||
Altria Group, Inc. | 16,350,000 | 430,005 | .62 | |||||||||
Procter & Gamble Co. | 6,670,000 | 410,138 | .60 | |||||||||
H.J. Heinz Co. | 7,000,000 | 368,480 | .54 | |||||||||
Sysco Corp. | 9,290,000 | 284,181 | .41 | |||||||||
Other securities | 1,162,584 | 1.68 | ||||||||||
4,761,727 | 6.91 | |||||||||||
Energy - 6.67% | ||||||||||||
Royal Dutch Shell PLC, Class B (ADR) | 10,120,000 | 745,338 | ||||||||||
Royal Dutch Shell PLC, Class A (ADR) | 6,000,000 | 441,360 | ||||||||||
Royal Dutch Shell PLC, Class B | 3,797,147 | 139,584 | 1.93 | |||||||||
Chevron Corp. | 10,835,000 | 1,127,057 | 1.64 | |||||||||
Spectra Energy Corp | 20,150,500 | 544,467 | .79 | |||||||||
Crescent Point Energy Corp. | 10,955,000 | 492,456 | .71 | |||||||||
TOTAL SA (ADR) | 4,035,000 | 218,172 | ||||||||||
TOTAL SA | 3,755,000 | 203,844 | .61 | |||||||||
ConocoPhillips | 5,000,000 | 359,950 | .52 | |||||||||
Other securities | 325,110 | .47 | ||||||||||
4,597,338 | 6.67 | |||||||||||
Health care - 6.39% | ||||||||||||
Bristol-Myers Squibb Co. | 50,405,000 | 1,444,607 | 2.10 | |||||||||
Merck & Co., Inc. | 37,742,166 | 1,288,140 | 1.87 | |||||||||
Pfizer Inc | 32,850,000 | 632,034 | .92 | |||||||||
Eli Lilly and Co. | 12,400,000 | 474,920 | .69 | |||||||||
Johnson & Johnson | 4,300,000 | 278,597 | .40 | |||||||||
Other securities | 282,115 | .41 | ||||||||||
4,400,413 | 6.39 | |||||||||||
Telecommunication services - 6.37% | ||||||||||||
Verizon Communications Inc. | 46,507,500 | 1,641,250 | 2.39 | |||||||||
Telstra Corp. Ltd. | 170,670,000 | 560,619 | .82 | |||||||||
AT&T Inc. | 18,424,621 | 539,104 | .78 | |||||||||
France Télécom SA | 21,340,000 | 442,780 | .64 | |||||||||
Koninklijke KPN NV | 28,067,263 | 401,121 | .58 | |||||||||
Portugal Telecom, SGPS, SA (1) | 46,135,276 | 400,137 | .58 | |||||||||
Other securities | 400,286 | .58 | ||||||||||
4,385,297 | 6.37 | |||||||||||
Consumer discretionary - 5.49% | ||||||||||||
Home Depot, Inc. | 33,695,000 | 1,176,966 | 1.71 | |||||||||
McDonald's Corp. | 8,110,000 | 701,353 | 1.02 | |||||||||
McGraw-Hill Companies, Inc. | 11,090,000 | 461,344 | .67 | |||||||||
Other securities | 1,442,637 | 2.09 | ||||||||||
3,782,300 | 5.49 | |||||||||||
Utilities - 4.99% | ||||||||||||
Duke Energy Corp. | 41,146,172 | 765,319 | 1.11 | |||||||||
National Grid PLC | 65,110,000 | 638,043 | .93 | |||||||||
Power Assets Holdings Ltd. | 55,138,000 | 456,314 | .66 | |||||||||
GDF SUEZ | 13,170,121 | 432,038 | .63 | |||||||||
Snam Rete Gas SpA | 53,108,326 | 306,924 | .44 | |||||||||
Other securities | 841,071 | 1.22 | ||||||||||
3,439,709 | 4.99 | |||||||||||
Materials - 3.41% | ||||||||||||
E.I. du Pont de Nemours and Co. | 17,115,000 | 880,053 | 1.28 | |||||||||
Nucor Corp. | 12,480,000 | 485,347 | .70 | |||||||||
Other securities | 982,010 | 1.43 | ||||||||||
2,347,410 | 3.41 | |||||||||||
Information technology - 3.30% | ||||||||||||
Microchip Technology Inc. (1) | 14,128,000 | 476,820 | .69 | |||||||||
Automatic Data Processing, Inc. | 8,485,000 | 436,893 | .64 | |||||||||
Maxim Integrated Products, Inc. | 14,406,000 | 330,762 | .48 | |||||||||
KLA-Tencor Corp. | 8,190,000 | 326,126 | .47 | |||||||||
Paychex, Inc. | 10,155,182 | 286,681 | .42 | |||||||||
Other securities | 413,848 | .60 | ||||||||||
2,271,130 | 3.30 | |||||||||||
Miscellaneous - 4.31% | ||||||||||||
Other common stocks in initial period of acquisition | 2,968,631 | 4.31 | ||||||||||
Total common stocks (cost: $39,537,047,000) | 43,489,835 | 63.14 | ||||||||||
Percent | ||||||||||||
Value | of net | |||||||||||
Preferred stocks - 0.49% | Shares | (000 | ) | assets | ||||||||
Financials - 0.32% | ||||||||||||
Fannie Mae, Series S, 8.25% noncumulative (2) | 1,511,450 | 3,569 | .01 | |||||||||
Other securities | 215,534 | .31 | ||||||||||
219,103 | .32 | |||||||||||
Miscellaneous - 0.17% | ||||||||||||
Other preferred stocks in initial period of acquisition | 119,445 | .17 | ||||||||||
Total preferred stocks (cost: $349,041,000) | 338,548 | .49 | ||||||||||
Percent | ||||||||||||
Value | of net | |||||||||||
Warrants - 0.00% | (000 | ) | assets | |||||||||
Miscellaneous - 0.00% | ||||||||||||
Other warrants in initial period of acquisition | 1,559 | .00 | ||||||||||
Total warrants (cost: $32,681,000) | 1,559 | .00 | ||||||||||
Percent | ||||||||||||
Value | of net | |||||||||||
Convertible securities - 1.18% | (000 | ) | assets | |||||||||
Other - 1.18% | ||||||||||||
Other securities | 812,123 | 1.18 | ||||||||||
Total convertible securities (cost: $770,549,000) | 812,123 | 1.18 | ||||||||||
Principal | Percent | |||||||||||
amount | Value | of net | ||||||||||
Bonds & notes - 30.49% | (000 | ) | (000 | ) | assets | |||||||
Mortgage-backed obligations (3) - 4.55% | ||||||||||||
Fannie Mae 3.00%-11.597% 2012-2047 (4) | $ | 1,805,273 | $ | 1,903,095 | 2.76 | |||||||
Freddie Mac 2.477%-11.079% 2018-2041 (4) | 244,441 | 264,471 | .39 | |||||||||
Other securities | 965,607 | 1.40 | ||||||||||
3,133,173 | 4.55 | |||||||||||
Consumer discretionary - 4.16% | ||||||||||||
Home Depot, Inc. 5.40%-5.95% 2016-2041 | 34,819 | 38,198 | .06 | |||||||||
Other securities | 2,826,559 | 4.10 | ||||||||||
2,864,757 | 4.16 | |||||||||||
Bonds & notes of U.S. government & government agencies - 3.64% | ||||||||||||
U.S. Treasury 0.625%-8.75% 2011-2041 (5) | 2,141,361 | 2,304,936 | 3.35 | |||||||||
Fannie Mae 1.00%-6.25% 2013-2029 | 38,850 | 47,058 | .07 | |||||||||
Freddie Mac 1.125%-1.75% 2012-2015 | 38,625 | 38,987 | .05 | |||||||||
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 2.20% 2012 | 11,750 | 11,933 | .02 | |||||||||
Other securities | 103,628 | .15 | ||||||||||
2,506,542 | 3.64 | |||||||||||
Telecommunication services - 2.04% | ||||||||||||
Verizon Communications Inc. 3.00%-8.75% 2014-2041 | 114,010 | 129,098 | .19 | |||||||||
Other securities | 1,277,518 | 1.85 | ||||||||||
1,406,616 | 2.04 | |||||||||||
Industrials - 1.95% | ||||||||||||
General Electric Co. 5.25% 2017 | 11,250 | 12,692 | ||||||||||
General Electric Capital Corp. 0.876%-2.25% 2014-2015 (4) | 47,000 | 46,885 | .09 | |||||||||
Lockheed Martin Corp. 4.121% 2013 | 5,000 | 5,275 | .01 | |||||||||
Other securities | 1,280,952 | 1.85 | ||||||||||
1,345,804 | 1.95 | |||||||||||
Energy - 1.29% | ||||||||||||
Shell International Finance BV 1.875%-6.375% 2013-2038 | 49,000 | 53,335 | .08 | |||||||||
Chevron Corp. 3.95%-4.95% 2014-2019 | 5,050 | 5,762 | .01 | |||||||||
Other securities | 832,138 | 1.20 | ||||||||||
891,235 | 1.29 | |||||||||||
Materials - 0.84% | ||||||||||||
E.I. du Pont de Nemours and Co. 0.667% 2014 (4) | 35,000 | 35,224 | .05 | |||||||||
Other securities | 541,549 | .79 | ||||||||||
576,773 | .84 | |||||||||||
Other - 12.01% | ||||||||||||
Other securities | 8,268,135 | 12.01 | ||||||||||
Miscellaneous - 0.01% | ||||||||||||
Other bonds & notes in initial period of acquisition | 7,232 | .01 | ||||||||||
Total bonds & notes (cost: $19,994,090,000) | 21,000,267 | 30.49 | ||||||||||
Principal | Percent | |||||||||||
amount | Value | of net | ||||||||||
Short-term securities - 4.59% | (000 | ) | (000 | ) | assets | |||||||
Fannie Mae 0.09%-0.23% due 8/1/2011-5/1/2012 | $ | 880,275 | $ | 879,520 | 1.28 | |||||||
Freddie Mac 0.11%-0.301% due 8/3/2011-5/30/2012 | 733,405 | 732,864 | 1.06 | |||||||||
Coca-Cola Co. 0.09%-0.16% due 8/22-9/23/2011 (6) | 281,200 | 281,172 | .41 | |||||||||
U.S. Treasury Bills 0.158%-0.242% due 8/25/2011-1/12/2012 | 220,210 | 220,122 | .32 | |||||||||
Merck & Co. Inc. 0.10% due 9/8/2011 (6) | 72,300 | 72,294 | .11 | |||||||||
Other securities | 973,534 | 1.41 | ||||||||||
Total short-term securities (cost: $3,159,430,000) | 3,159,506 | 4.59 | ||||||||||
Total investment securities (cost: $63,842,838,000) | 68,801,838 | 99.89 | ||||||||||
Other assets less liabilities | 72,652 | .11 | ||||||||||
Net assets | $ | 68,874,490 | 100.00 | % |
As permitted by U.S. Securities and Exchange Commission regulations, "Miscellaneous" securities include holdings in their first year of acquisition that have not previously been publicly disclosed. | |||
"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio. Some of these securities (with an aggregate value of $43,071,000, which represented .06% of the net assets of the fund) may be subject to legal or contractual restrictions on resale. | |||
"Miscellaneous" and "Other securities" include securities which were valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities was $217,082,000, which represented .32% of the net assets of the fund. |
Investments in affiliates | ||||||
A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares. The value of the fund's affiliated-company holdings is either shown in the summary investment portfolio or included in the value of "Other securities" under the respective industry sectors. Further details on such holdings and related transactions during the year ended July 31, 2011, appear below. |
Beginning shares or principal amount | Additions | Reductions | Ending shares or principal amount | Dividend or interest income (000) | Value of affiliates at 7/31/2011 (000) | |||||||||||||||||||
Waste Management, Inc. | 27,615,000 | 500,000 | - | 28,115,000 | $ | 36,673 | $ | 885,341 | ||||||||||||||||
WMX Technologies, Inc. 7.10% 2026 | $ | 10,125,000 | - | $ | 10,125,000 | - | 631 | - | ||||||||||||||||
Microchip Technology Inc. | 14,128,000 | - | - | 14,128,000 | 5,282 | 476,820 | ||||||||||||||||||
Portugal Telecom, SGPS, SA | - | 57,470,000 | 11,334,724 | 46,135,276 | 146,857 | 400,137 | ||||||||||||||||||
Digital Realty Trust, Inc. (7) | 1,893,300 | 3,896,700 | - | 5,790,000 | 11,247 | 354,406 | ||||||||||||||||||
Hospitality Properties Trust | 8,015,000 | - | - | 8,015,000 | 14,427 | 202,379 | ||||||||||||||||||
Hospitality Properties Trust 6.70% 2018 | $ | 16,175,000 | - | - | $ | 16,175,000 | 1,088 | 17,695 | ||||||||||||||||
Hospitality Properties Trust 6.30% 2016 | $ | 2,400,000 | $ | 11,177,000 | - | $ | 13,577,000 | 494 | 15,082 | |||||||||||||||
Hospitality Properties Trust 6.75% 2013 | $ | 21,265,000 | - | $ | 8,615,000 | $ | 12,650,000 | 965 | 13,212 | |||||||||||||||
Hospitality Properties Trust 5.625% 2017 | $ | 8,485,000 | $ | 1,684,000 | - | $ | 10,169,000 | 623 | 10,673 | |||||||||||||||
Hospitality Properties Trust 5.125% 2015 | $ | 2,160,000 | - | - | $ | 2,160,000 | 167 | 2,301 | ||||||||||||||||
R.R. Donnelley & Sons Co. | 3,095,400 | 9,700,000 | - | 12,795,400 | 4,077 | 240,681 | ||||||||||||||||||
Masco Corp. | 16,989,176 | 4,800,775 | - | 21,789,951 | 6,537 | 229,884 | ||||||||||||||||||
Arthur J. Gallagher & Co. | 6,000,000 | - | - | 6,000,000 | 7,800 | 168,720 | ||||||||||||||||||
FirstMerit Corp. | 5,495,000 | - | - | 5,495,000 | 3,517 | 80,282 | ||||||||||||||||||
Trustmark Corp. | 3,257,000 | - | - | 3,257,000 | 2,996 | 70,970 | ||||||||||||||||||
Applied Industrial Technologies, Inc.(8) | 2,738,790 | - | 2,738,790 | - | 931 | - | ||||||||||||||||||
Clarent Hospital Corp. Liquidating Trust(8) | 484,684 | - | 484,684 | - | - | - | ||||||||||||||||||
First Niagara Financial Group, Inc.(8) | 11,650,000 | - | 9,250,000 | 2,400,000 | 5,774 | - | ||||||||||||||||||
Georgia Gulf Corp.(8) | 2,623,146 | - | 1,387,222 | 1,235,924 | - | - | ||||||||||||||||||
Georgia Gulf Corp. 9.00% 2017(8) | $ | 50,965,000 | $ | 6,200,000 | $ | 2,600,000 | $ | 54,565,000 | 4,837 | - | ||||||||||||||
Georgia Gulf Corp. 10.75% 2016(8) | $ | 3,385,000 | - | - | $ | 3,385,000 | 369 | - | ||||||||||||||||
Macquarie Korea Infrastructure Fund(8) | 21,541,078 | - | 7,886,480 | 13,654,598 | 5,008 | - | ||||||||||||||||||
Prime Infrastructure Group(8) | 22,756,141 | - | 22,756,141 | - | 7,044 | - | ||||||||||||||||||
Weyerhaeuser Co.(8) | 10,728,000 | 15,484,881 | - | 26,212,881 | 7,864 | - | ||||||||||||||||||
$ | 275,208 | $ | 3,168,583 |
The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item. | |||
(1) Represents an affiliated company as defined under the Investment Company Act of 1940. | |||
(2) Security did not produce income during the last 12 months. | |||
(3) Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. | |||
(4) Coupon rate may change periodically. | |||
(5) Index-linked bond whose principal amount moves with a government price index. | |||
(6) Acquired in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in "Other securities," was $5,835,207,000, which represented 8.47% of the net assets of the fund. | |||
(7) This security was an unaffiliated issuer in its initial period of acquisition at 7/31/2010; it was not publicly disclosed. | |||
(8) Unaffiliated issuer at 7/31/2011. | |||
Key to abbreviation | |||
ADR = American Depositary Receipts | |||
See Notes to Financial Statements |
Financial statements
Statement of assets and liabilities | ||||||||
at July 31, 2011 | (dollars in thousands) | |||||||
Assets: | ||||||||
Investment securities, at value: | ||||||||
Unaffiliated issuers (cost: $60,297,846) | $ | 65,633,255 | ||||||
Affiliated issuers (cost: $3,544,992) | 3,168,583 | $ | 68,801,838 | |||||
Cash denominated in currencies other than U.S. dollars | ||||||||
(cost: $17,194) | 17,150 | |||||||
Cash | 2,819 | |||||||
Receivables for: | ||||||||
Sales of investments | 801,085 | |||||||
Sales of fund's shares | 58,834 | |||||||
Dividends and interest | 427,829 | 1,287,748 | ||||||
70,109,555 | ||||||||
Liabilities: | ||||||||
Payables for: | ||||||||
Purchases of investments | 1,008,578 | |||||||
Repurchases of fund's shares | 175,506 | |||||||
Investment advisory services | 12,658 | |||||||
Services provided by related parties | 34,228 | |||||||
Trustees' deferred compensation | 3,761 | |||||||
Other | 334 | 1,235,065 | ||||||
Net assets at July 31, 2011 | $ | 68,874,490 | ||||||
Net assets consist of: | ||||||||
Capital paid in on shares of beneficial interest | $ | 70,806,636 | ||||||
Undistributed net investment income | 551,902 | |||||||
Accumulated net realized loss | (7,444,191 | ) | ||||||
Net unrealized appreciation | 4,960,143 | |||||||
Net assets at July 31, 2011 | $ | 68,874,490 |
(dollars and shares in thousands, except per-share amounts) | ||||||||||||
Shares of beneficial interest issued and outstanding (no stated par value) - | ||||||||||||
unlimited shares authorized (4,063,346 total shares outstanding) | ||||||||||||
Net assets | Shares outstanding | Net asset value per share | ||||||||||
Class A | $ | 52,940,167 | 3,118,990 | $ | 16.97 | |||||||
Class B | 1,760,502 | 104,511 | 16.85 | |||||||||
Class C | 6,157,350 | 366,521 | 16.80 | |||||||||
Class F-1 | 2,024,586 | 119,484 | 16.94 | |||||||||
Class F-2 | 746,722 | 44,010 | 16.97 | |||||||||
Class 529-A | 939,053 | 55,412 | 16.95 | |||||||||
Class 529-B | 76,190 | 4,512 | 16.89 | |||||||||
Class 529-C | 330,522 | 19,569 | 16.89 | |||||||||
Class 529-E | 44,110 | 2,609 | 16.91 | |||||||||
Class 529-F-1 | 31,257 | 1,844 | 16.95 | |||||||||
Class R-1 | 108,874 | 6,447 | 16.89 | |||||||||
Class R-2 | 552,082 | 32,820 | 16.82 | |||||||||
Class R-3 | 1,118,391 | 66,103 | 16.92 | |||||||||
Class R-4 | 808,918 | 47,725 | 16.95 | |||||||||
Class R-5 | 477,944 | 28,160 | 16.97 | |||||||||
Class R-6 | 757,822 | 44,629 | 16.98 | |||||||||
See Notes to Financial Statements |
Statement of operations | ||||||||
for the year ended July 31, 2011 | (dollars in thousands) | |||||||
Investment income: | ||||||||
Income: | ||||||||
Dividends (net of non-U.S. taxes of $85,230; | ||||||||
also includes $266,034 from affiliates) | $ | 1,954,438 | ||||||
Interest (net of non-U.S. taxes of $4; | ||||||||
also includes $9,174 from affiliates) | 1,348,222 | $ | 3,302,660 | |||||
Fees and expenses*: | ||||||||
Investment advisory services | 168,778 | |||||||
Distribution services | 233,380 | |||||||
Transfer agent services | 45,372 | |||||||
Administrative services | 21,213 | |||||||
Reports to shareholders | 2,683 | |||||||
Registration statement and prospectus | 847 | |||||||
Trustees' compensation | 1,066 | |||||||
Auditing and legal | 174 | |||||||
Custodian | 2,622 | |||||||
Other | 1,956 | 478,091 | ||||||
Net investment income | 2,824,569 | |||||||
Net realized gain and unrealized appreciation | ||||||||
on investments and currency: | ||||||||
Net realized gain on: | ||||||||
Investments (includes $31,161 net gain from affiliates) | 1,790,877 | |||||||
Currency transactions | 4,750 | 1,795,627 | ||||||
Net unrealized appreciation (depreciation) on: | ||||||||
Investments | 4,485,459 | |||||||
Currency translations | (31 | ) | 4,485,428 | |||||
Net realized gain and unrealized appreciation | ||||||||
on investments and currency | 6,281,055 | |||||||
Net increase in net assets resulting | ||||||||
from operations | $ | 9,105,624 | ||||||
(*) Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements. | ||||||||
See Notes to Financial Statements | ||||||||
Statements of changes in net assets | ||||||||
(dollars in thousands) | ||||||||
Year ended July 31 | ||||||||
2011 | 2010 | |||||||
Operations: | ||||||||
Net investment income | $ | 2,824,569 | $ | 2,985,974 | ||||
Net realized gain on investments and currency transactions | 1,795,627 | 2,038,986 | ||||||
Net unrealized appreciation on investments and currency translations | 4,485,428 | 3,712,658 | ||||||
Net increase in net assets resulting from operations | 9,105,624 | 8,737,618 | ||||||
Dividends paid to shareholders from net investment income | (2,972,073 | ) | (2,671,237 | ) | ||||
Net capital share transactions | (789,509 | ) | (2,485,102 | ) | ||||
Total increase in net assets | 5,344,042 | 3,581,279 | ||||||
Net assets: | ||||||||
Beginning of year | 63,530,448 | 59,949,169 | ||||||
End of year (including undistributed | ||||||||
net investment income: $551,902 and $681,967, respectively) | $ | 68,874,490 | $ | 63,530,448 | ||||
See Notes to Financial Statements |
Notes to financial statements
1. | Organization |
The Income Fund of America (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks current income while secondarily striving for capital growth through investments in stocks and fixed-income securities. Effective October 1, 2010, the fund reorganized from a Maryland corporation to a Delaware statutory trust in accordance with a proposal approved by shareholders on November 24, 2009.
The fund has 16 share classes consisting of five retail share classes, five 529 college savings plan share classes and six retirement plan share classes. The 529 college savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F-1) can be used to save for college education. The six retirement plan share classes (R-1, R-2, R-3, R-4, R-5 and R-6) are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are described below:
Share class | Initial sales charge | Contingent deferred sales charge upon redemption | Conversion feature |
Classes A and 529-A | Up to 5.75% | None (except 1% for certain redemptions within one year of purchase without an initial sales charge) | None |
Classes B and 529-B* | None | Declines from 5% to 0% for redemptions within six years of purchase | Classes B and 529-B convert to Classes A and 529-A, respectively, after eight years |
Class C | None | 1% for redemptions within one year of purchase | Class C converts to Class F-1 after 10 years |
Class 529-C | None | 1% for redemptions within one year of purchase | None |
Class 529-E | None | None | None |
Classes F-1, F-2 and 529-F-1 | None | None | None |
Classes R-1, R-2, R-3, R-4, R-5 and R-6 | None | None | None |
*Class B and 529-B shares of the fund are not available for purchase.
Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses ("class-specific fees and expenses"), primarily due to different arrangements for distribution, administrative and shareholder services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.
2. | Significant accounting policies |
The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The fund follows the significant accounting policies described below, as well as the valuation policies described in the next section on valuation.
Security transactions and related investment income – Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
Class allocations – Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, administrative and shareholder services, are charged directly to the respective share class.
Dividends and distributions to shareholders – Dividends and distributions paid to shareholders are recorded on the ex-dividend date.
Currency translation – Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. On the accompanying financial statements, the effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.
Loan transactions – The fund may enter into loan transactions in which the fund acquires a loan either through an agent, by assignment from another holder, or as a participation interest in another holder's portion of a loan. The loan is often administered by a financial institution that acts as agent for the holders of the loan, and the fund may be required to receive approval from the agent and/or borrower prior to the sale of the investment. The loan's interest rate and maturity date may change based on the terms of the loan, including potential early payments of principal.
3. | Valuation |
The fund’s investments are reported at fair value as defined by accounting principles generally accepted in the United States of America. The fund generally determines the net asset value of each share class as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.
Methods and inputs – The fund uses the following methods and inputs to establish the fair value of its assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.
Equity securities are generally valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market on which the security trades.
Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are generally valued at prices obtained as of approximately 3:00 p.m. New York time, or relevant local time for securities trading outside U.S. time zones, from one or more pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However, these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.
Fixed-income class | Examples of standard inputs |
All | Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”) |
Corporate bonds & notes; convertible securities | Standard inputs and underlying equity of the issuer |
Bonds & notes of governments & government agencies | Standard inputs and interest rate volatilities |
Mortgage-backed; asset-backed obligations | Standard inputs and cash flows, prepayment information, default rates, delinquency and loss assumptions, collateral characteristics, credit enhancements and specific deal information |
Municipal securities | Standard inputs and, for certain distressed securities, cash flows or liquidation values using a net present value calculation based on inputs that include, but are not limited to, financial statements and debt contracts |
Where the investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or not deemed to be representative), fixed-income securities will be valued in good faith at the mean quoted bid and asked prices that are reasonably and timely available (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type.
Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are generally valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates fair value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days.
Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under guidelines adopted by authority of the fund's board of trustees. Market quotations may be considered unreliable if events occur that materially affect the value of securities (particularly equity securities trading outside the U.S.) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange. Various inputs may be reviewed in order to make a good faith determination of a security’s fair value. These inputs include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.
Classifications - The fund classifies its assets and liabilities into three levels based on the inputs used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the fund’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of July 31, 2011 (dollars in thousands):
Investment securities: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common stocks: | ||||||||||||||||
Industrials | $ | 5,700,096 | $ | - | $ | 163 | $ | 5,700,259 | ||||||||
Financials | 4,835,621 | - | - | 4,835,621 | ||||||||||||
Consumer staples | 4,761,727 | - | - | 4,761,727 | ||||||||||||
Energy | 4,597,338 | - | - | 4,597,338 | ||||||||||||
Health care | 4,400,413 | - | - | 4,400,413 | ||||||||||||
Telecommunication services | 4,385,297 | - | - | 4,385,297 | ||||||||||||
Consumer discretionary | 3,782,300 | - | - | 3,782,300 | ||||||||||||
Utilities | 3,439,709 | - | - | 3,439,709 | ||||||||||||
Materials | 2,347,410 | - | - | 2,347,410 | ||||||||||||
Information technology | 2,271,130 | - | - | 2,271,130 | ||||||||||||
Miscellaneous | 2,968,631 | - | - | 2,968,631 | ||||||||||||
Preferred stocks | 128,279 | 210,269 | - | 338,548 | ||||||||||||
Warrants | - | 1,559 | - | 1,559 | ||||||||||||
Convertible securities | 482,652 | 329,471 | - | 812,123 | ||||||||||||
Bonds & notes: | ||||||||||||||||
Corporate bonds & notes | - | 6,915,356 | 169,829 | 7,085,185 | ||||||||||||
Mortgage-backed obligations | - | 3,112,910 | 20,263 | 3,133,173 | ||||||||||||
Bonds & notes of U.S. government & government agencies | - | 2,506,542 | - | 2,506,542 | ||||||||||||
Other | - | 8,268,135 | - | 8,268,135 | ||||||||||||
Miscellaneous | - | 7,232 | - | 7,232 | ||||||||||||
Short-term securities | - | 3,159,506 | - | 3,159,506 | ||||||||||||
Total | $ | 44,100,603 | $ | 24,510,980 | $ | 190,255 | $ | 68,801,838 |
The following table reconciles the valuation of the fund's Level 3 investment securities and related transactions for the year ended July 31, 2011 (dollars in thousands): | ||||||||||||||||||||||||||||||||
Beginning value at 8/1/2010 | Transfers into Level 3(*) | Purchases | Sales | Net realized loss(†) | Unrealized appreciation(†) | Transfers out of Level 3(*) | Ending value at 7/31/2011 | |||||||||||||||||||||||||
Investment securities | $ | 83,477 | $ | 45,976 | $ | 92,516 | $ | (19,882 | ) | $ | (2,780 | ) | $ | 12,117 | $ | (21,169 | ) | $ | 190,255 | |||||||||||||
Net unrealized appreciation during the period on Level 3 investment securities held at July 31, 2011 (dollars in thousands)(†): | $ | 5,615 | ||||||||||||||||||||||||||||||
(*) Transfers into or out of Level 3 are based on the beginning market value of the quarter in which they occurred. | ||||||||||||||||||||||||||||||||
(†) Net realized loss and unrealized appreciation are included in the related amounts on investments in the statement of operations. |
4. | Risk factors |
Investing in the fund may involve certain risks including, but not limited to, those described below.
Market conditions — The prices of, and the income generated by, the common stocks and other securities held by the fund may decline due to market conditions and other factors, including those directly involving the issuers of securities held by the fund.
Investing in income-oriented stocks — Income provided by the fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the fund invests.
Investing in bonds — Rising interest rates will generally cause the prices of bonds and other debt securities to fall. In addition, falling interest rates may cause an issuer to redeem, call or refinance a security before its stated maturity, which may result in the fund having to reinvest the proceeds in lower yielding securities. Longer maturity debt securities may be subject to greater price fluctuations than shorter maturity debt securities.
Bonds and other debt securities are subject to credit risk, which is the possibility that the credit strength of an issuer will weaken and/or an issuer of a debt security will fail to make timely payments of principal or interest and the security will go into default.
Investing in lower rated bonds – Lower rated bonds and other lower rated debt securities generally have higher rates of interest and involve greater risk of default or price declines due to changes in the issuer’s creditworthiness than those of higher quality debt securities. The market prices of these securities may fluctuate more than the prices of higher quality debt securities and may decline significantly in periods of general economic difficulty. These risks may be increased with respect to investments in junk bonds.
Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations outside the U.S., may lose value because of political, social or economic developments in the country or region in which the issuer operates. These securities may also lose value due to changes in foreign currency exchange rates against the U.S. dollar and/or currencies of other countries. Securities markets in certain countries may be more volatile and/or less liquid than those in the U.S. Investments outside the U.S. may also be subject to different settlement and accounting practices and different regulatory, legal and reporting standards than those in the U.S. These risks may be heightened in connection with investments in developing countries.
Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause the fund to lose value or its results to lag relevant benchmarks or other funds with similar objectives.
5. | Taxation and distributions |
Federal income taxation – The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.
As of and during the period ended July 31, 2011, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.
The fund is not subject to examination by U.S. federal tax authorities for tax years before 2007 and by state tax authorities for tax years before 2006.
Non-U.S. taxation – Dividend and interest income are recorded net of non-U.S. taxes paid. Gains realized by the fund on the sale of securities in certain countries are subject to non-U.S. taxes.
Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to different treatment for items such as currency gains and losses; short-term capital gains and losses; and net capital losses. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes.
During the year ended July 31, 2011, the fund reclassified $17,517,000 from accumulated net realized loss to undistributed net investment income and $78,000 from undistributed net investment income to capital paid in on shares of beneficial interest to align financial reporting with tax reporting.
As of July 31, 2011, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:
(dollars in thousands) | ||||
Undistributed ordinary income | $ | 554,647 | ||
Capital loss carryforward expiring 2018* | (7,442,409 | ) | ||
Gross unrealized appreciation on investment securities | 7,815,563 | |||
Gross unrealized depreciation on investment securities | (2,868,745 | ) | ||
Net unrealized appreciation on investment securities | 4,946,818 | |||
Cost of investment securities | 63,855,020 | |||
*Reflects the utilization of capital loss carryforwards of $1,778,798,000. The capital loss carryforward will be used to offset any capital gains realized by the fund in future years through the expiration date. The fund will not make distributions from capital gains while a capital loss carryforward remains. |
Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized after July 31, 2011, may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.
Tax-basis distributions paid to shareholders from ordinary income were as follows (dollars in thousands):
Year ended July 31 | ||||||||
Share class | 2011 | 2010 | ||||||
Class A | $ | 2,330,998 | $ | 2,089,796 | ||||
Class B | 80,729 | 97,153 | ||||||
Class C | 230,046 | 211,864 | ||||||
Class F-1 | 85,584 | 79,624 | ||||||
Class F-2 | 30,163 | 19,206 | ||||||
Class 529-A | 38,154 | 29,614 | ||||||
Class 529-B | 3,103 | 3,344 | ||||||
Class 529-C | 11,366 | 9,321 | ||||||
Class 529-E | 1,682 | 1,307 | ||||||
Class 529-F-1 | 1,288 | 933 | ||||||
Class R-1 | 3,860 | 3,054 | ||||||
Class R-2 | 20,558 | 17,811 | ||||||
Class R-3 | 46,768 | 40,939 | ||||||
Class R-4 | 35,774 | 29,998 | ||||||
Class R-5 | 22,040 | 19,594 | ||||||
Class R-6 | 29,960 | 17,679 | ||||||
Total | $ | 2,972,073 | $ | 2,671,237 |
6. | Fees and transactions with related parties |
Capital Research and Management Company ("CRMC"), the fund’s investment adviser, is the parent company of American Funds Distributors,® Inc. ("AFD"), the principal underwriter of the fund’s shares, and American Funds Service Company® ("AFS"), the fund’s transfer agent.
Investment advisory services – The fund has an investment advisory and service agreement with CRMC that provides for monthly fees accrued daily. These fees are based on a series of decreasing annual rates beginning with 0.250% on the first $500 million of daily net assets and decreasing to 0.123% on such assets in excess of $89 billion. The agreement also provides for monthly fees, accrued daily, of 2.25% of the fund’s monthly gross income. For the year ended July 31, 2011, the investment advisory services fee was $168,778,000, which was equivalent to an annualized rate of 0.246% of average daily net assets.
Class-specific fees and expenses – Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below:
Distribution services – The fund has plans of distribution for all share classes, except Classes F-2, R-5 and R-6. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted below. In some cases, the board of trustees has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.
For Classes A and 529-A, distribution-related expenses include the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of July 31, 2011, there were no unreimbursed expenses subject to reimbursement for Classes A or 529-A.
Share class | Currently approved limits | Plan limits |
Class A | 0.25% | 0.25% |
Class 529-A | 0.25 | 0.50 |
Classes B and 529-B | 1.00 | 1.00 |
Classes C, 529-C and R-1 | 1.00 | 1.00 |
Class R-2 | 0.75 | 1.00 |
Classes 529-E and R-3 | 0.50 | 0.75 |
Classes F-1, 529-F-1 and R-4 | 0.25 | 0.50 |
Transfer agent services – The fund has a transfer agent agreement with AFS for Classes A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC as described below.
Administrative services – The fund has an administrative services agreement with CRMC for all share classes, except Classes A and B, to provide certain services, including transfer agent and recordkeeping services; coordinating, monitoring, assisting and overseeing third-party service providers; and educating advisers and shareholders about the impact of market-related events, tax laws affecting investments, retirement plan restrictions, exchange limitations and other related matters. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5 and 0.05% for Class R-6) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services.
Each 529 share class is subject to an additional administrative services fee payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan. The quarterly fee is based on a series of decreasing annual rates beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.06% on such assets between $120 billion and $150 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.
Expenses under the agreements described on the previous page for the year ended July 31, 2011, were as follows (dollars in thousands):
Communications: insert ClassSpecificExpenses.xls
Administrative services | ||||||||||||||||||||
Share class | Distribution services | Transfer agent services | CRMC administrative services | Transfer agent services | Commonwealth of Virginia administrative services | |||||||||||||||
Class A | $ | 125,524 | $ | 43,530 | Not applicable | Not applicable | Not applicable | |||||||||||||
Class B | 21,782 | 1,842 | Not applicable | Not applicable | Not applicable | |||||||||||||||
Class C | 62,195 | Included in administrative services | $ | 7,528 | $ | 830 | Not applicable | |||||||||||||
Class F-1 | 4,849 | 2,410 | 106 | Not applicable | ||||||||||||||||
Class F-2 | Not applicable | 933 | 23 | Not applicable | ||||||||||||||||
Class 529-A | 1,912 | 701 | 84 | $ | 873 | |||||||||||||||
Class 529-B | 865 | 69 | 20 | 86 | ||||||||||||||||
Class 529-C | 3,133 | 252 | 57 | 314 | ||||||||||||||||
Class 529-E | 204 | 31 | 4 | 41 | ||||||||||||||||
Class 529-F-1 | - | 22 | 3 | 28 | ||||||||||||||||
Class R-1 | 1,046 | 138 | 21 | Not applicable | ||||||||||||||||
Class R-2 | 4,171 | 833 | 1,441 | Not applicable | ||||||||||||||||
Class R-3 | 5,679 | 1,692 | 649 | Not applicable | ||||||||||||||||
Class R-4 | 2,020 | 1,196 | �� | 37 | Not applicable | |||||||||||||||
Class R-5 | Not applicable | 460 | 9 | Not applicable | ||||||||||||||||
Class R-6 | Not applicable | 320 | 2 | Not applicable | ||||||||||||||||
Total | $ | 233,380 | $ | 45,372 | $ | 16,585 | $ | 3,286 | $ | 1,342 |
Trustees’ deferred compensation – Trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Trustees’ compensation of $1,066,000, shown on the accompanying financial statements, includes $398,000 in current fees (either paid in cash or deferred) and a net increase of $668,000 in the value of the deferred amounts.
Affiliated officers and trustees – Officers and certain trustees of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or trustees received any compensation directly from the fund.
7. | Capital share transactions |
Capital share transactions in the fund were as follows (dollars and shares in thousands):
Sales(*) | Reinvestments of dividends and distributions | Repurchases(*) | Net (decrease) increase | |||||||||||||||||||||||||||||
Share class | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | ||||||||||||||||||||||||
Year ended July 31, 2011 | ||||||||||||||||||||||||||||||||
Class A | $ | 6,109,385 | 365,399 | $ | 2,176,992 | 132,135 | $ | (8,467,235 | ) | (506,767 | ) | $ | (180,858 | ) | (9,233 | ) | ||||||||||||||||
Class B | 68,204 | 4,123 | 75,787 | 4,644 | (1,027,318 | ) | (61,791 | ) | (883,327 | ) | (53,024 | ) | ||||||||||||||||||||
Class C | 721,625 | 43,532 | 209,682 | 12,849 | (1,216,808 | ) | (73,505 | ) | (285,501 | ) | (17,124 | ) | ||||||||||||||||||||
Class F-1 | 542,351 | 32,437 | 78,645 | 4,779 | (583,617 | ) | (35,130 | ) | 37,379 | 2,086 | ||||||||||||||||||||||
Class F-2 | 390,748 | 23,557 | 23,003 | 1,394 | (178,431 | ) | (10,685 | ) | 235,320 | 14,266 | ||||||||||||||||||||||
Class 529-A | 184,842 | 11,076 | 38,140 | 2,316 | (110,881 | ) | (6,657 | ) | 112,101 | 6,735 | ||||||||||||||||||||||
Class 529-B | 4,176 | 252 | 3,102 | 190 | (31,146 | ) | (1,874 | ) | (23,868 | ) | (1,432 | ) | ||||||||||||||||||||
Class 529-C | 62,459 | 3,749 | 11,361 | 692 | (51,065 | ) | (3,081 | ) | 22,755 | 1,360 | ||||||||||||||||||||||
Class 529-E | 8,543 | 513 | 1,682 | 102 | (5,027 | ) | (303 | ) | 5,198 | 312 | ||||||||||||||||||||||
Class 529-F-1 | 11,653 | 700 | 1,288 | 78 | (5,993 | ) | (361 | ) | 6,948 | 417 | ||||||||||||||||||||||
Class R-1 | 32,530 | 1,958 | 3,829 | 233 | (27,745 | ) | (1,658 | ) | 8,614 | 533 | ||||||||||||||||||||||
Class R-2 | 143,026 | 8,622 | 20,524 | 1,256 | (179,860 | ) | (10,818 | ) | (16,310 | ) | (940 | ) | ||||||||||||||||||||
Class R-3 | 265,796 | 15,932 | 46,708 | 2,843 | (352,638 | ) | (21,095 | ) | (40,134 | ) | (2,320 | ) | ||||||||||||||||||||
Class R-4 | 218,671 | 13,063 | 35,718 | 2,171 | (258,147 | ) | (15,392 | ) | (3,758 | ) | (158 | ) | ||||||||||||||||||||
Class R-5 | 134,567 | 8,000 | 22,019 | 1,338 | (168,389 | ) | (10,041 | ) | (11,803 | ) | (703 | ) | ||||||||||||||||||||
Class R-6 | 226,926 | 13,561 | 29,959 | 1,813 | (29,150 | ) | (1,735 | ) | 227,735 | 13,639 | ||||||||||||||||||||||
Total net increase (decrease) | $ | 9,125,502 | 546,474 | $ | 2,778,439 | 168,833 | $ | (12,693,450 | ) | (760,893 | ) | $ | (789,509 | ) | (45,586 | ) | ||||||||||||||||
Year ended July 31, 2010 | ||||||||||||||||||||||||||||||||
Class A | $ | 5,109,735 | 335,067 | $ | 1,909,103 | 124,792 | $ | (8,765,580 | ) | (576,354 | ) | $ | (1,746,742 | ) | (116,495 | ) | ||||||||||||||||
Class B | 69,078 | 4,576 | 89,100 | 5,865 | (851,843 | ) | (56,276 | ) | (693,665 | ) | (45,835 | ) | ||||||||||||||||||||
Class C | 646,265 | 42,774 | 182,915 | 12,069 | (1,151,256 | ) | (76,308 | ) | (322,076 | ) | (21,465 | ) | ||||||||||||||||||||
Class F-1 | 347,380 | 22,812 | 69,299 | 4,536 | (582,284 | ) | (38,413 | ) | (165,605 | ) | (11,065 | ) | ||||||||||||||||||||
Class F-2 | 195,285 | 12,881 | 12,577 | 824 | (134,507 | ) | (8,854 | ) | 73,355 | 4,851 | ||||||||||||||||||||||
Class 529-A | 138,942 | 9,113 | 29,610 | 1,937 | (86,396 | ) | (5,685 | ) | 82,156 | 5,365 | ||||||||||||||||||||||
Class 529-B | 5,063 | 333 | 3,344 | 219 | (17,575 | ) | (1,153 | ) | (9,168 | ) | (601 | ) | ||||||||||||||||||||
Class 529-C | 52,729 | 3,470 | 9,317 | 611 | (46,884 | ) | (3,100 | ) | 15,162 | 981 | ||||||||||||||||||||||
Class 529-E | 7,221 | 475 | 1,307 | 86 | (5,035 | ) | (333 | ) | 3,493 | 228 | ||||||||||||||||||||||
Class 529-F-1 | 5,848 | 384 | 933 | 61 | (5,273 | ) | (348 | ) | 1,508 | 97 | ||||||||||||||||||||||
Class R-1 | 31,826 | 2,092 | 3,031 | 199 | (25,382 | ) | (1,678 | ) | 9,475 | 613 | ||||||||||||||||||||||
Class R-2 | 136,033 | 8,997 | 17,706 | 1,166 | (145,325 | ) | (9,616 | ) | 8,414 | 547 | ||||||||||||||||||||||
Class R-3 | 252,361 | 16,591 | 40,598 | 2,660 | (268,692 | ) | (17,679 | ) | 24,267 | 1,572 | ||||||||||||||||||||||
Class R-4 | 217,458 | 14,322 | 29,785 | 1,948 | (201,984 | ) | (13,233 | ) | 45,259 | 3,037 | ||||||||||||||||||||||
Class R-5 | 103,146 | 6,784 | 19,534 | 1,277 | (110,781 | ) | (7,299 | ) | 11,899 | 762 | ||||||||||||||||||||||
Class R-6 | 167,893 | 10,984 | 17,675 | 1,153 | (8,402 | ) | (544 | ) | 177,166 | 11,593 | ||||||||||||||||||||||
Total net increase (decrease) | $ | 7,486,263 | 491,655 | $ | 2,435,834 | 159,403 | $ | (12,407,199 | ) | (816,873 | ) | $ | (2,485,102 | ) | (165,815 | ) | ||||||||||||||||
* Includes exchanges between share classes of the fund. |
8. | Investment transactions |
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $22,357,483,000 and $22,519,267,000, respectively, during the year ended July 31, 2011.
Financial highlights(1)
Income (loss) from investment operations(2) | Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | Net investment income | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return(3) (4) | Net assets, end of period (in millions) | Ratio of expenses to average net assets before reimbursements/ waivers | Ratio of expenses to average net assets after reimbursements/ waivers(4) | Ratio of net income to average net assets(4) | ||||||||||||||||||||||||||||||||||||||||
Class A: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | $ | 15.48 | $ | .71 | $ | 1.53 | $ | 2.24 | $ | (.75 | ) | $ | - | $ | (.75 | ) | $ | 16.97 | 14.68 | % | $ | 52,940 | .58 | % | .58 | % | 4.24 | % | ||||||||||||||||||||||||
Year ended 7/31/2010 | 14.04 | .73 | 1.37 | 2.10 | (.66 | ) | - | (.66 | ) | 15.48 | 15.09 | 48,437 | .61 | .61 | 4.82 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.98 | .74 | (2.98 | ) | (2.24 | ) | (.70 | ) | - | (.70 | ) | 14.04 | (12.72 | ) | 45,569 | .64 | .63 | 5.50 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.54 | .87 | (2.67 | ) | (1.80 | ) | (.91 | ) | (.85 | ) | (1.76 | ) | 16.98 | (9.46 | ) | 58,029 | .57 | .54 | 4.53 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.33 | .87 | 1.73 | 2.60 | (.93 | ) | (.46 | ) | (1.39 | ) | 20.54 | 13.66 | 65,713 | .56 | .54 | 4.22 | ||||||||||||||||||||||||||||||||||||
Class B: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.37 | .58 | 1.52 | 2.10 | (.62 | ) | - | (.62 | ) | 16.85 | 13.82 | 1,760 | 1.34 | 1.34 | 3.48 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 13.94 | .60 | 1.37 | 1.97 | (.54 | ) | - | (.54 | ) | 15.37 | 14.24 | 2,421 | 1.38 | 1.38 | 4.01 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.87 | .63 | (2.95 | ) | (2.32 | ) | (.61 | ) | - | (.61 | ) | 13.94 | (13.37 | ) | 2,835 | 1.41 | 1.39 | 4.74 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.43 | .72 | (2.66 | ) | (1.94 | ) | (.77 | ) | (.85 | ) | (1.62 | ) | 16.87 | (10.16 | ) | 4,149 | 1.33 | 1.31 | 3.76 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.22 | .70 | 1.74 | 2.44 | (.77 | ) | (.46 | ) | (1.23 | ) | 20.43 | 12.83 | 5,094 | 1.32 | 1.30 | 3.46 | ||||||||||||||||||||||||||||||||||||
Class C: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.33 | .57 | 1.51 | 2.08 | (.61 | ) | - | (.61 | ) | 16.80 | 13.77 | 6,157 | 1.39 | 1.39 | 3.43 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 13.91 | .60 | 1.36 | 1.96 | (.54 | ) | - | (.54 | ) | 15.33 | 14.17 | 5,882 | 1.43 | 1.43 | 4.00 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.84 | .62 | (2.94 | ) | (2.32 | ) | (.61 | ) | - | (.61 | ) | 13.91 | (13.43 | ) | 5,637 | 1.45 | 1.44 | 4.69 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.39 | .71 | (2.65 | ) | (1.94 | ) | (.76 | ) | (.85 | ) | (1.61 | ) | 16.84 | (10.22 | ) | 7,676 | 1.38 | 1.35 | 3.72 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.19 | .69 | 1.73 | 2.42 | (.76 | ) | (.46 | ) | (1.22 | ) | 20.39 | 12.80 | 8,911 | 1.37 | 1.35 | 3.41 | ||||||||||||||||||||||||||||||||||||
Class F-1: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.46 | .70 | 1.52 | 2.22 | (.74 | ) | - | (.74 | ) | 16.94 | 14.58 | 2,025 | .64 | .64 | 4.19 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 14.02 | .73 | 1.37 | 2.10 | (.66 | ) | - | (.66 | ) | 15.46 | 15.08 | 1,815 | .65 | .65 | 4.78 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.95 | .74 | (2.97 | ) | (2.23 | ) | (.70 | ) | - | (.70 | ) | 14.02 | (12.71 | ) | 1,801 | .66 | .65 | 5.49 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.52 | .86 | (2.68 | ) | (1.82 | ) | (.90 | ) | (.85 | ) | (1.75 | ) | 16.95 | (9.56 | ) | 2,712 | .61 | .58 | 4.48 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.30 | .86 | 1.74 | 2.60 | (.92 | ) | (.46 | ) | (1.38 | ) | 20.52 | 13.69 | 3,075 | .60 | .57 | 4.18 | ||||||||||||||||||||||||||||||||||||
Class F-2: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.48 | .74 | 1.53 | 2.27 | (.78 | ) | - | (.78 | ) | 16.97 | 14.90 | 747 | .40 | .40 | 4.42 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 14.04 | .77 | 1.36 | 2.13 | (.69 | ) | - | (.69 | ) | 15.48 | 15.31 | 460 | .42 | .42 | 5.04 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.91 | .68 | (2.82 | ) | (2.14 | ) | (.73 | ) | - | (.73 | ) | 14.04 | (12.19 | ) | 350 | .44 | .43 | 5.39 | ||||||||||||||||||||||||||||||||||
Class 529-A: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.46 | .69 | 1.53 | 2.22 | (.73 | ) | - | (.73 | ) | 16.95 | 14.62 | 939 | .67 | .67 | 4.15 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 14.03 | .73 | 1.35 | 2.08 | (.65 | ) | - | (.65 | ) | 15.46 | 14.95 | 753 | .69 | .69 | 4.77 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.96 | .73 | (2.96 | ) | (2.23 | ) | (.70 | ) | - | (.70 | ) | 14.03 | (12.72 | ) | 608 | .70 | .68 | 5.44 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.52 | .85 | (2.66 | ) | (1.81 | ) | (.90 | ) | (.85 | ) | (1.75 | ) | 16.96 | (9.55 | ) | 662 | .65 | .63 | 4.46 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.31 | .85 | 1.73 | 2.58 | (.91 | ) | (.46 | ) | (1.37 | ) | 20.52 | 13.57 | 655 | .65 | .63 | 4.14 | ||||||||||||||||||||||||||||||||||||
Class 529-B: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.41 | .56 | 1.52 | 2.08 | (.60 | ) | - | (.60 | ) | 16.89 | 13.66 | 76 | 1.46 | 1.46 | 3.37 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 13.98 | .59 | 1.37 | 1.96 | (.53 | ) | - | (.53 | ) | 15.41 | 14.10 | 92 | 1.49 | 1.49 | 3.92 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.92 | .62 | (2.96 | ) | (2.34 | ) | (.60 | ) | - | (.60 | ) | 13.98 | (13.47 | ) | 91 | 1.51 | 1.50 | 4.63 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.47 | .69 | (2.65 | ) | (1.96 | ) | (.74 | ) | (.85 | ) | (1.59 | ) | 16.92 | (10.25 | ) | 110 | 1.46 | 1.43 | 3.65 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.26 | .68 | 1.73 | 2.41 | (.74 | ) | (.46 | ) | (1.20 | ) | 20.47 | 12.71 | 117 | 1.45 | 1.43 | 3.34 | ||||||||||||||||||||||||||||||||||||
Class 529-C: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.41 | .56 | 1.53 | 2.09 | (.61 | ) | - | (.61 | ) | 16.89 | 13.71 | 331 | 1.46 | 1.46 | 3.37 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 13.99 | .60 | 1.35 | 1.95 | (.53 | ) | - | (.53 | ) | 15.41 | 14.04 | 281 | 1.48 | 1.48 | 3.97 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.93 | .62 | (2.96 | ) | (2.34 | ) | (.60 | ) | - | (.60 | ) | 13.99 | (13.45 | ) | 241 | 1.50 | 1.49 | 4.63 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.49 | .70 | (2.67 | ) | (1.97 | ) | (.74 | ) | (.85 | ) | (1.59 | ) | 16.93 | (10.29 | ) | 276 | 1.45 | 1.43 | 3.66 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.27 | .69 | 1.74 | 2.43 | (.75 | ) | (.46 | ) | (1.21 | ) | 20.49 | 12.77 | 285 | 1.45 | 1.42 | 3.35 | ||||||||||||||||||||||||||||||||||||
Class 529-E: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.43 | .65 | 1.52 | 2.17 | (.69 | ) | - | (.69 | ) | 16.91 | 14.27 | 44 | .94 | .94 | 3.88 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 14.00 | .68 | 1.36 | 2.04 | (.61 | ) | - | (.61 | ) | 15.43 | 14.66 | 35 | .97 | .97 | 4.49 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.93 | .68 | (2.95 | ) | (2.27 | ) | (.66 | ) | - | (.66 | ) | 14.00 | (12.98 | ) | 29 | 1.00 | .98 | 5.14 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.49 | .79 | (2.66 | ) | (1.87 | ) | (.84 | ) | (.85 | ) | (1.69 | ) | 16.93 | (9.83 | ) | 32 | .94 | .92 | 4.17 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.28 | .79 | 1.73 | 2.52 | (.85 | ) | (.46 | ) | (1.31 | ) | 20.49 | 13.27 | 32 | .94 | .91 | 3.86 | ||||||||||||||||||||||||||||||||||||
Class 529-F-1: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | $ | 15.46 | $ | .73 | $ | 1.53 | $ | 2.26 | $ | (.77 | ) | $ | - | $ | (.77 | ) | $ | 16.95 | 14.87 | % | $ | 31 | .45 | % | .45 | % | 4.37 | % | ||||||||||||||||||||||||
Year ended 7/31/2010 | 14.03 | .76 | 1.35 | 2.11 | (.68 | ) | - | (.68 | ) | 15.46 | 15.19 | 22 | .47 | .47 | 4.99 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.96 | .75 | (2.96 | ) | (2.21 | ) | (.72 | ) | - | (.72 | ) | 14.03 | (12.56 | ) | 19 | .50 | .48 | 5.64 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.52 | .89 | (2.66 | ) | (1.77 | ) | (.94 | ) | (.85 | ) | (1.79 | ) | 16.96 | (9.35 | ) | 21 | .44 | .42 | 4.67 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.30 | .90 | 1.73 | 2.63 | (.95 | ) | (.46 | ) | (1.41 | ) | 20.52 | 13.87 | 20 | .44 | .41 | 4.37 | ||||||||||||||||||||||||||||||||||||
Class R-1: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.41 | .57 | 1.52 | 2.09 | (.61 | ) | - | (.61 | ) | 16.89 | 13.76 | 109 | 1.41 | 1.41 | 3.42 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 13.99 | .61 | 1.35 | 1.96 | (.54 | ) | - | (.54 | ) | 15.41 | 14.10 | 91 | 1.44 | 1.44 | 4.03 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.92 | .62 | (2.95 | ) | (2.33 | ) | (.60 | ) | - | (.60 | ) | 13.99 | (13.36 | ) | 74 | 1.46 | 1.44 | 4.68 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.48 | .71 | (2.67 | ) | (1.96 | ) | (.75 | ) | (.85 | ) | (1.60 | ) | 16.92 | (10.25 | ) | 86 | 1.39 | 1.37 | 3.73 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.27 | .70 | 1.72 | 2.42 | (.75 | ) | (.46 | ) | (1.21 | ) | 20.48 | 12.75 | 75 | 1.41 | 1.39 | 3.41 | ||||||||||||||||||||||||||||||||||||
Class R-2: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.35 | .57 | 1.51 | 2.08 | (.61 | ) | - | (.61 | ) | 16.82 | 13.75 | 552 | 1.41 | 1.41 | 3.41 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 13.93 | .60 | 1.35 | 1.95 | (.53 | ) | - | (.53 | ) | 15.35 | 14.10 | 518 | 1.47 | 1.47 | 3.97 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.86 | .61 | (2.95 | ) | (2.34 | ) | (.59 | ) | - | (.59 | ) | 13.93 | (13.54 | ) | 463 | 1.56 | 1.54 | 4.58 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.42 | .70 | (2.66 | ) | (1.96 | ) | (.75 | ) | (.85 | ) | (1.60 | ) | 16.86 | (10.26 | ) | 516 | 1.44 | 1.42 | 3.66 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.22 | .69 | 1.72 | 2.41 | (.75 | ) | (.46 | ) | (1.21 | ) | 20.42 | 12.73 | 539 | 1.44 | 1.39 | 3.38 | ||||||||||||||||||||||||||||||||||||
Class R-3: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.44 | .64 | 1.53 | 2.17 | (.69 | ) | - | (.69 | ) | 16.92 | 14.23 | 1,118 | .96 | .96 | 3.86 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 14.01 | .68 | 1.35 | 2.03 | (.60 | ) | - | (.60 | ) | 15.44 | 14.63 | 1,056 | .99 | .99 | 4.45 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.94 | .68 | (2.95 | ) | (2.27 | ) | (.66 | ) | - | (.66 | ) | 14.01 | (12.99 | ) | 936 | 1.00 | .99 | 5.14 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.50 | .79 | (2.66 | ) | (1.87 | ) | (.84 | ) | (.85 | ) | (1.69 | ) | 16.94 | (9.83 | ) | 1,061 | .95 | .93 | 4.16 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.29 | .79 | 1.73 | 2.52 | (.85 | ) | (.46 | ) | (1.31 | ) | 20.50 | 13.26 | 978 | .94 | .92 | 3.86 | ||||||||||||||||||||||||||||||||||||
Class R-4: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.46 | .70 | 1.53 | 2.23 | (.74 | ) | - | (.74 | ) | 16.95 | 14.62 | 809 | .66 | .66 | 4.17 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 14.03 | .72 | 1.36 | 2.08 | (.65 | ) | - | (.65 | ) | 15.46 | 14.95 | 740 | .68 | .68 | 4.77 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.96 | .72 | (2.95 | ) | (2.23 | ) | (.70 | ) | - | (.70 | ) | 14.03 | (12.72 | ) | 629 | .70 | .69 | 5.43 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.53 | .85 | (2.68 | ) | (1.83 | ) | (.89 | ) | (.85 | ) | (1.74 | ) | 16.96 | (9.56 | ) | 597 | .66 | .63 | 4.49 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.31 | .85 | 1.74 | 2.59 | (.91 | ) | (.46 | ) | (1.37 | ) | 20.53 | 13.57 | 451 | .65 | .63 | 4.15 | ||||||||||||||||||||||||||||||||||||
Class R-5: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.48 | .75 | 1.53 | 2.28 | (.79 | ) | - | (.79 | ) | 16.97 | 14.94 | 478 | .36 | .36 | 4.46 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 14.04 | .77 | 1.37 | 2.14 | (.70 | ) | - | (.70 | ) | 15.48 | 15.36 | 447 | .38 | .38 | 5.07 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2009 | 16.97 | .76 | (2.96 | ) | (2.20 | ) | (.73 | ) | - | (.73 | ) | 14.04 | (12.53 | ) | 395 | .40 | .38 | 5.72 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2008 | 20.54 | .91 | (2.68 | ) | (1.77 | ) | (.95 | ) | (.85 | ) | (1.80 | ) | 16.97 | (9.26 | ) | 559 | .36 | .33 | 4.80 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2007 | 19.32 | .91 | 1.74 | 2.65 | (.97 | ) | (.46 | ) | (1.43 | ) | 20.54 | 13.94 | 350 | .36 | .33 | 4.42 | ||||||||||||||||||||||||||||||||||||
Class R-6: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2011 | 15.49 | .76 | 1.52 | 2.28 | (.79 | ) | - | (.79 | ) | 16.98 | 14.99 | 758 | .31 | .31 | 4.51 | |||||||||||||||||||||||||||||||||||||
Year ended 7/31/2010 | 14.05 | .79 | 1.35 | 2.14 | (.70 | ) | - | (.70 | ) | 15.49 | 15.40 | 480 | .33 | .33 | 5.20 | |||||||||||||||||||||||||||||||||||||
Period from 5/1/2009 to 7/31/2009 | 12.55 | .19 | 1.48 | 1.67 | (.17 | ) | - | (.17 | ) | 14.05 | 13.42 | 272 | .09 | .09 | 1.45 |
Year ended July 31 | ||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
Portfolio turnover rate for all share classes | 38 | % | 35 | % | 49 | % | 38 | % | 32 | % |
(1)Based on operations for the periods shown (unless otherwise noted) and, accordingly, may not be representative of a full year. | |||||||||||||
(2)Based on average shares outstanding. | |||||||||||||
(3)Total returns exclude any applicable sales charges, including contingent deferred sales charges. | |||||||||||||
(4)This column reflects the impact, if any, of certain reimbursements/waivers from CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services. In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes. | |||||||||||||
See Notes to Financial Statements |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of The Income Fund of America:
We have audited the accompanying statement of assets and liabilities, including the summary investment portfolio, of The Income Fund of America (the “Fund”), as of July 31, 2011, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2011, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Income Fund of America as of July 31, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Costa Mesa, California
September 7, 2011
Expense example
unaudited
As a shareholder of the fund, you incur two types of costs: (1) transaction costs, such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads), and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period (February 1, 2011, through July 31, 2011).
Actual expenses:
The first line of each share class in the table on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes:
The second line of each share class in the table on the next page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.
Notes:
There are some account fees that are charged to certain types of accounts, such as individual retirement accounts and 529 college savings plan accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually), that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F-1, F-2 and 529-F-1 shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would be lower by the amount of these fees.
Note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning account value 2/1/2011 | Ending account value 7/31/2011 | Expenses paid during period* | Annualized expense ratio | |||||||||||||
Class A -- actual return | $ | 1,000.00 | $ | 1,029.38 | $ | 2.92 | .58 | % | ||||||||
Class A -- assumed 5% return | 1,000.00 | 1,021.92 | 2.91 | .58 | ||||||||||||
Class B -- actual return | 1,000.00 | 1,026.10 | 6.73 | 1.34 | ||||||||||||
Class B -- assumed 5% return | 1,000.00 | 1,018.15 | 6.71 | 1.34 | ||||||||||||
Class C -- actual return | 1,000.00 | 1,025.54 | 6.98 | 1.39 | ||||||||||||
Class C -- assumed 5% return | 1,000.00 | 1,017.90 | 6.95 | 1.39 | ||||||||||||
Class F-1 -- actual return | 1,000.00 | 1,028.60 | 3.22 | .64 | ||||||||||||
Class F-1 -- assumed 5% return | 1,000.00 | 1,021.62 | 3.21 | .64 | ||||||||||||
Class F-2 -- actual return | 1,000.00 | 1,030.33 | 2.06 | .41 | ||||||||||||
Class F-2 -- assumed 5% return | 1,000.00 | 1,022.76 | 2.06 | .41 | ||||||||||||
Class 529-A -- actual return | 1,000.00 | 1,029.03 | 3.37 | .67 | ||||||||||||
Class 529-A -- assumed 5% return | 1,000.00 | 1,021.47 | 3.36 | .67 | ||||||||||||
Class 529-B -- actual return | 1,000.00 | 1,024.92 | 7.38 | 1.47 | ||||||||||||
Class 529-B -- assumed 5% return | 1,000.00 | 1,017.50 | 7.35 | 1.47 | ||||||||||||
Class 529-C -- actual return | 1,000.00 | 1,025.14 | 7.33 | 1.46 | ||||||||||||
Class 529-C -- assumed 5% return | 1,000.00 | 1,017.55 | 7.30 | 1.46 | ||||||||||||
Class 529-E -- actual return | 1,000.00 | 1,027.71 | 4.78 | .95 | ||||||||||||
Class 529-E -- assumed 5% return | 1,000.00 | 1,020.08 | 4.76 | .95 | ||||||||||||
Class 529-F-1 -- actual return | 1,000.00 | 1,030.17 | 2.32 | .46 | ||||||||||||
Class 529-F-1 -- assumed 5% return | 1,000.00 | 1,022.51 | 2.31 | .46 | ||||||||||||
Class R-1 -- actual return | 1,000.00 | 1,025.38 | 7.08 | 1.41 | ||||||||||||
Class R-1 -- assumed 5% return | 1,000.00 | 1,017.80 | 7.05 | 1.41 | ||||||||||||
Class R-2 -- actual return | 1,000.00 | 1,024.84 | 7.08 | 1.41 | ||||||||||||
Class R-2 -- assumed 5% return | 1,000.00 | 1,017.80 | 7.05 | 1.41 | ||||||||||||
Class R-3 -- actual return | 1,000.00 | 1,027.53 | 4.88 | .97 | ||||||||||||
Class R-3 -- assumed 5% return | 1,000.00 | 1,019.98 | 4.86 | .97 | ||||||||||||
Class R-4 -- actual return | 1,000.00 | 1,029.03 | 3.32 | .66 | ||||||||||||
Class R-4 -- assumed 5% return | 1,000.00 | 1,021.52 | 3.31 | .66 | ||||||||||||
Class R-5 -- actual return | 1,000.00 | 1,030.55 | 1.81 | .36 | ||||||||||||
Class R-5 -- assumed 5% return | 1,000.00 | 1,023.01 | 1.81 | .36 | ||||||||||||
Class R-6 -- actual return | 1,000.00 | 1,030.79 | 1.56 | .31 | ||||||||||||
Class R-6 -- assumed 5% return | 1,000.00 | 1,023.26 | 1.56 | .31 | ||||||||||||
*The “expenses paid during period” are equal to the “annualized expense ratio,” multiplied by the average account value over the period, multiplied by the number of days in the period, and divided by 365 (to reflect the one-half year period). |
Tax information
unaudited
We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended July 31, 2011:
Qualified dividend income | $ | 2,151,250,000 | ||
Corporate dividends received deduction | $ | 1,184,677,000 | ||
U.S. government income that may be exempt from state taxation | $ | 66,692,000 |
Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2012, to determine the calendar year amounts to be included on their 2011 tax returns. Shareholders should consult their tax advisers.
Other share class results
unaudited
Classes B, C, F and 529
Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.
Average annual total returns for periods ended June 30, 2011 (the most recent calendar quarter-end): | ||||||||||||
10 years1/ | ||||||||||||
1 year | 5 years | Life of class | ||||||||||
Class B shares2 | ||||||||||||
Reflecting applicable contingent deferred sales charge | ||||||||||||
(CDSC), maximum of 5%, payable only if shares are | ||||||||||||
sold within six years of purchase | 17.32 | % | 3.13 | % | 5.66 | % | ||||||
Not reflecting CDSC | 22.32 | 3.44 | 5.66 | |||||||||
Class C shares | ||||||||||||
Reflecting CDSC, maximum of 1%, payable only | ||||||||||||
if shares are sold within one year of purchase | 21.22 | 3.39 | 5.43 | |||||||||
Not reflecting CDSC | 22.22 | 3.39 | 5.43 | |||||||||
Class F-1 shares3 | ||||||||||||
Not reflecting annual asset-based fee charged | ||||||||||||
by sponsoring firm | 23.18 | 4.20 | 6.24 | |||||||||
Class F-2 shares3 — first sold 8/1/08 | ||||||||||||
Not reflecting annual asset-based fee charged | ||||||||||||
by sponsoring firm | 23.44 | — | 5.89 | |||||||||
Class 529-A shares4 — first sold 2/15/02 | ||||||||||||
Reflecting 5.75% maximum sales charge | 16.07 | 2.92 | 5.99 | |||||||||
Not reflecting maximum sales charge | 23.15 | 4.15 | 6.66 | |||||||||
Class 529-B shares2,4 — first sold 2/19/02 | ||||||||||||
Reflecting applicable CDSC, maximum of 5%, payable | ||||||||||||
only if shares are sold within six years of purchase | 17.13 | 3.00 | 6.00 | |||||||||
Not reflecting CDSC | 22.13 | 3.32 | 6.00 | |||||||||
Class 529-C shares4 — first sold 2/19/02 | ||||||||||||
Reflecting CDSC, maximum of 1%, payable only | ||||||||||||
if shares are sold within one year of purchase | 21.10 | 3.32 | 5.89 | |||||||||
Not reflecting CDSC | 22.10 | 3.32 | 5.89 | |||||||||
Class 529-E shares3,4 — first sold 2/25/02 | 22.79 | 3.85 | 6.31 | |||||||||
Class 529-F-1 shares3,4 — first sold 9/17/02 | ||||||||||||
Not reflecting annual asset-based fee charged | ||||||||||||
by sponsoring firm | 23.42 | 4.38 | 8.14 |
1Applicable to Classes B, C and F-1 shares only. All other share classes reflect results for the life of the class. |
2These shares are not available for purchase. |
3These shares are sold without any initial or contingent deferred sales charge. |
4Results shown do not reflect the $10 account setup fee and an annual $10 account maintenance fee. |
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 29 and 30 for details that include expense ratios for all share classes.
For information regarding the differences among the various share classes, refer to the fund’s prospectus.
Board of trustees and other officers
“Independent” trustees1 | ||
Year first | ||
elected a | ||
trustee of | ||
Name and age | the fund2 | Principal occupation(s) during past five years |
Mary Jane Elmore, 57 | 2008 | Managing Director and General Partner, Institutional |
Venture Partners | ||
Robert A. Fox, 74 | 1972 | Managing General Partner, Fox Investments LP; |
Chairman of the Board | corporate director | |
(Independent and | ||
Non-Executive) | ||
Leonade D. Jones, 63 | 1993 | Retired; former Treasurer, The Washington Post |
Company | ||
William D. Jones, 56 | 2008 | Real estate developer/owner, President and CEO, |
CityLink Investment Corporation (acquires, develops | ||
and manages real estate ventures in selected urban | ||
communities) and City Scene Management | ||
Company (provides commercial asset and property | ||
management services) | ||
John M. Lillie, 74 | 2003 | Business consultant |
John G. McDonald, 74 | 1976 | Stanford Investors Professor, Graduate School of |
Business, Stanford University | ||
James J. Postl, 65 | 2008 | Retired; former President and CEO, Pennzoil-Quaker |
State Company (automotive products and services) | ||
Isaac Stein, 64 | 2004 | President, Waverly Associates (private investment |
fund); Chairman Emeritus of the Board of Trustees, | ||
Stanford University | ||
“Independent” trustees1 | ||
Number of | ||
portfolios | ||
in fund | ||
complex3 | ||
overseen by | ||
Name and age | trustee | Other directorships4 held by trustee |
Mary Jane Elmore, 57 | 3 | None |
Robert A. Fox, 74 | 9 | None |
Chairman of the Board | ||
(Independent and | ||
Non-Executive) | ||
Leonade D. Jones, 63 | 9 | None |
William D. Jones, 56 | 7 | Sempra Energy |
John M. Lillie, 74 | 3 | None |
John G. McDonald, 74 | 13 | iStar Financial, Inc.; Plum Creek Timber Co.; |
QuinStreet, Inc.; Scholastic Corporation | ||
James J. Postl, 65 | 3 | Cooper Industries; Pulte, Inc. |
Isaac Stein, 64 | 3 | Alexza Pharmaceuticals, Inc.; Maxygen, Inc. |
Henry E. Riggs, a member of the board of trustees since 1989, has retired from the board. The trustees thank Mr. Riggs for his service and dedication to the fund.
“Interested” trustee5 | ||
Year first | ||
elected a | ||
trustee or | Principal occupation(s) during past five years and | |
Name, age and | officer of | positions held with affiliated entities or the |
position with fund | the fund2 | principal underwriter of the fund |
Hilda L. Applbaum, 50 | 1998 | Senior Vice President — Capital World Investors, |
Vice Chairman of the Board | Capital Research and Management Company | |
“Interested” trustee5 | ||
Number of | ||
portfolios | ||
in fund | ||
complex3 | ||
Name, age and | overseen by | |
position with fund | trustee | Other directorships4 held by trustee |
Hilda L. Applbaum, 50 | 1 | None |
Vice Chairman of the Board |
The fund’s statement of additional information includes further details about fund trustees and is available without charge upon request by calling American Funds Service Company at 800/421-0180 or by visiting the American Funds website at americanfunds.com. The address for all trustees and officers of the fund is 333 South Hope Street, Los Angeles, CA 90071, Attention: Secretary.
See page 36 for footnotes.
Other officers7 | ||
Year first | ||
elected | Principal occupation(s) during past five years | |
Name, age and | an officer | and positions held with affiliated entities or the |
position with fund | of the fund2 | principal underwriter of the fund |
David C. Barclay, 54 | 1998 | Senior Vice President — Fixed Income, Capital |
President | Research and Management Company; Director, | |
Capital Research and Management Company | ||
Abner D. Goldstine, 81 | 1993 | Senior Vice President — Fixed Income, Capital |
Senior Vice President | Research and Management Company; Director, | |
Capital Research and Management Company | ||
Dina N. Perry, 65 | 1994 | Senior Vice President — Capital World Investors, |
Senior Vice President | Capital Research and Management Company; | |
Director, Capital Research and Management | ||
Company | ||
Paul F. Roye, 57 | 2007 | Senior Vice President — Fund Business |
Senior Vice President | Management Group, Capital Research and | |
Management Company; Director, American Funds | ||
Service Company;6 former Director, Division of | ||
Investment Management, United States Securities | ||
and Exchange Commission | ||
Andrew B. Suzman, 44 | 2004 | Senior Vice President — Capital World Investors, |
Senior Vice President | Capital Research Company;6 Director, American | |
Funds Distributors, Inc.;6 Director, Capital Strategy | ||
Research, Inc.6 | ||
Joanna F. Jonsson, 48 | 2006 | Senior Vice President — Capital World Investors, |
Vice President | Capital Research Company;6 Director, Capital | |
International Limited6 | ||
John H. Smet, 55 | 1994 | Senior Vice President — Fixed Income, Capital |
Vice President | Research and Management Company; Director, | |
The Capital Group Companies, Inc.6 | ||
Steven T. Watson, 56 | 2006 | Senior Vice President — Capital World Investors, |
Vice President | Capital Research Company;6 Director, Capital | |
Research Company6 | ||
Patrick F. Quan, 53 | 1986 | Vice President — Fund Business Management |
Secretary | Group, Capital Research and Management | |
Company | ||
Jeffrey P. Regal, 40 | 2011 | Vice President — Fund Business Management |
Treasurer | Group, Capital Research and Management | |
Company | ||
Julie E. Lawton, 38 | 2009 | Associate — Capital Research and Management |
Assistant Secretary | Company | |
M. Susan Gupton, 38 | 2011 | Vice President — Fund Business Management |
Assistant Treasurer | Group, Capital Research and Management | |
Company | ||
Dori Laskin, 60 | 2011 | Vice President — Fund Business Management |
Assistant Treasurer | Group, Capital Research and Management | |
Company |
1The term “independent” trustee refers to a trustee who is not an “interested person” of the fund within the meaning of the Investment Company Act of 1940. |
2Trustees and officers of the fund serve until their resignation, removal or retirement. |
3Capital Research and Management Company manages the American Funds, consisting of 33 funds. Capital Research and Management Company also manages American Funds Insurance Series,® which is composed of 18 funds and serves as the underlying investment vehicle for certain variable insurance contracts; and American Funds Target Date Retirement Series,® which is composed of 10 funds and is available through tax-deferred retirement plans and IRAs. |
4This includes all directorships (other than those in the American Funds or other funds managed by Capital Research and Management Company) that are held by each trustee as a director of a public company or a registered investment company. |
5“Interested persons” within the meaning of the Investment Company Act of 1940, on the basis of their affiliation with the fund’s investment adviser, Capital Research and Management Company, or affiliated entities (including the fund’s principal underwriter). |
6Company affiliated with Capital Research and Management Company. |
7All of the officers listed are officers and/or directors/trustees of one or more of the other funds for which Capital Research and Management Company serves as investment adviser. |
Office of the fund
One Market
Steuart Tower, Suite 2000
Mailing address: P.O. Box 7650
San Francisco, CA 94120-7650
Investment adviser
Capital Research and
Management Company
333 South Hope Street
Los Angeles, CA 90071-1406
6455 Irvine Center Drive
Irvine, CA 92618
Transfer agent for shareholder accounts
American Funds Service Company
(Write to the address near you.)
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
Custodian of assets
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070
Counsel
Bingham McCutchen LLP
355 South Grand Avenue, Suite 4400
Los Angeles, CA 90071-3106
Independent registered public accounting firm
Deloitte & Touche LLP
695 Town Center Drive
Suite 1200
Costa Mesa, CA 92626-7188
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the fund’s prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.
“American Funds Proxy Voting Procedures and Principles” — which describes how we vote proxies relating to portfolio securities — is available on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the U.S. Securities and Exchange Commission (SEC) for the 12 months ended June 30 by August 31. The proxy voting record is available free of charge on the SEC website at sec.gov and on the American Funds website.
A complete July 31, 2011, portfolio of The Income Fund of America’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).
The Income Fund of America files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is available free of charge on the SEC website. You may also review or, for a fee, copy this filing at the SEC’s Public Reference Room in Washington, D.C. Additional information regarding the operation of the Public Reference Room may be obtained by calling the SEC’s Office of Investor Education and Advocacy at 800/SEC-0330. Additionally, the list of portfolio holdings is available by calling AFS.
This report is for the information of shareholders of The Income Fund of America, but it also may be used as sales literature when preceded or accompanied by the current prospectus or summary prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after September 30, 2011, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.
What makes American Funds different?
For 80 years, we have followed a consistent philosophy to benefit our investors. Our 33 carefully conceived, broadly diversified funds, in addition to the target date retirement series, offer opportunities that have attracted over 50 million shareholder accounts.
Our unique combination of strengths includes these five factors:
•A long-term, value-oriented approach |
We seek to buy securities at reasonable prices relative to their prospects and hold them for the long term.
•An extensive global research effort |
Our investment professionals travel the world to find the best investment opportunities and gain a comprehensive understanding of companies and markets.
•The multiple portfolio counselor system |
Our unique approach to portfolio management, developed more than 50 years ago, blends teamwork with individual accountability and has provided American Funds with a sustainable method of achieving fund objectives.
•Experienced investment professionals |
American Funds portfolio counselors have an average of 27 years of investment experience, providing a depth of knowledge and broad perspective that few organizations have.
•A commitment to low management fees |
The American Funds provide exceptional value for shareholders, with management fees that are among the lowest in the mutual fund industry.
American Funds span a range of investment objectives
•Growth funds |
Emphasis on long-term growth through stocks |
AMCAP Fund® |
EuroPacific Growth Fund® |
The Growth Fund of America® |
The New Economy Fund® |
New Perspective Fund® |
New World Fund® |
SMALLCAP World Fund® |
•Growth-and-income funds |
Emphasis on long-term growth and dividends through stocks |
American Mutual Fund® |
Capital World Growth and Income FundSM |
Fundamental InvestorsSM |
International Growth and Income FundSM |
The Investment Company of America® |
Washington Mutual Investors FundSM |
•Equity-income funds |
Emphasis on above-average income and growth through stocks and/or bonds |
Capital Income Builder® |
>The Income Fund of America® |
•Balanced funds |
Emphasis on long-term growth and current income through stocks and bonds |
American Balanced Fund® |
American Funds Global Balanced FundSM |
•Bond funds |
Emphasis on current income through bonds |
American Funds Mortgage FundSM |
American High-Income TrustSM |
The Bond Fund of AmericaSM |
Capital World Bond Fund® |
Intermediate Bond Fund of America® |
Short-Term Bond Fund of AmericaSM |
U.S. Government Securities FundSM |
•Tax-exempt bond funds |
Emphasis on tax-exempt current income through municipal bonds |
American Funds Short-Term Tax-Exempt Bond FundSM |
American High-Income Municipal Bond Fund® |
Limited Term Tax-Exempt Bond Fund of AmericaSM |
The Tax-Exempt Bond Fund of America® |
State-specific tax-exempt funds |
American Funds Tax-Exempt Fund of New YorkSM |
The Tax-Exempt Fund of California® |
The Tax-Exempt Fund of Maryland® |
The Tax-Exempt Fund of Virginia® |
•Money market fund |
American Funds Money Market Fund® |
•American Funds Target Date Retirement Series® |
The Capital Group Companies
American Funds Capital Research and Management Capital International Capital Guardian Capital Bank and Trust
Lit No. MFGEAR-906-0911P
Litho in USA BAG/Q/8061-S28700
Printed on paper containing 10% post-consumer waste
Printed with inks containing soy and/or vegetable oil
ITEM 2 – Code of Ethics
The Registrant has adopted a Code of Ethics that applies to its Principal Executive Officer and Principal Financial Officer. The Registrant undertakes to provide to any person without charge, upon request, a copy of the Code of Ethics. Such request can be made to American Funds Service Company at 800/421-0180 or to the Secretary of the Registrant, One Market, Steuart Tower, Suite 2000, San Francisco, California 94105.
ITEM 3 – Audit Committee Financial Expert
The Registrant’s board has determined that Isaac Stein, a member of the Registrant’s audit committee, is an “audit committee financial expert” and "independent," as such terms are defined in this Item. This designation will not increase the designee’s duties, obligations or liability as compared to his or her duties, obligations and liability as a member of the audit committee and of the board, nor will it reduce the responsibility of the other audit committee members. There may be other individuals who, through education or experience, would qualify as "audit committee financial experts" if the board had designated them as such. Most importantly, the board believes each member of the audit committee contributes significantly to the effective oversight of the Registrant’s financial statements and condition.
ITEM 4 – Principal Accountant Fees and Services
Registrant: | ||||
a) Audit Fees: | ||||
2010 | $121,000 | |||
2011 | $122,000 | |||
b) Audit-Related Fees: | ||||
2010 | $21,000 | |||
2011 | $21,000 | |||
The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s investment adviser conducted in accordance with Statement on Standards for Attestation Engagements Number 16 (which replaced Statement on Auditing Standards Number 70) issued by the American Institute of Certified Public Accountants. | ||||
c) Tax Fees: | ||||
2010 | $7,000 | |||
2011 | $8,000 | |||
The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns. | ||||
d) All Other Fees: | ||||
2010 | None | |||
2011 | None | |||
Adviser and affiliates (includes only fees for non-audit services billed to the adviser and affiliates for engagements that relate directly to the operations and financial reporting of the Registrant and were subject to the pre-approval policies described below): | ||||
a) Audit Fees: | ||||
Not Applicable | ||||
b) Audit-Related Fees: | ||||
2010 | $996,000 | |||
2011 | $1,184,000 | |||
The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s transfer agent, principal underwriter and investment adviser conducted in accordance with Statement on Standards for Attestation Engagements Number 16 (which replaced Statement on Auditing Standards Number 70) issued by the American Institute of Certified Public Accountants. | ||||
c) Tax Fees: | ||||
2010 | $10,000 | |||
2011 | $17,000 | |||
The tax fees consist of consulting services relating to the Registrant’s investments. | ||||
d) All Other Fees: | ||||
2010 | $2,000 | |||
2011 | $2,000 | |||
The other fees consist of subscription services related to an accounting research tool. |
All audit and permissible non-audit services that the Registrant’s audit committee considers compatible with maintaining the independent registered public accounting firm’s independence are required to be pre-approved by the committee. The pre-approval requirement will extend to all non-audit services provided to the Registrant, the investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant. The committee will not delegate its responsibility to pre-approve these services to the investment adviser. The committee may delegate to one or more committee members the authority to review and pre-approve audit and permissible non-audit services. Actions taken under any such delegation will be reported to the full committee at its next meeting. The pre-approval requirement is waived with respect to non-audit services if certain conditions are met. The pre-approval requirement was not waived for any of the non-audit services listed above provided to the Registrant, adviser and affiliates.
Aggregate non-audit fees paid to the Registrant’s auditors, including fees for all services billed to the Registrant, adviser and affiliates that provide ongoing services to the Registrant, were $1,519,000 for fiscal year 2010 and $1,767,000 for fiscal year 2011. The non-audit services represented by these amounts were brought to the attention of the committee and considered to be compatible with maintaining the auditors’ independence.
ITEM 5 – Audit Committee of Listed Registrants
Not applicable to this Registrant, insofar as the Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.
ITEM 6 – Schedule of Investments
The Income Fund of America®
Investment portfolio
July 31, 2011
Common stocks — 63.14% | Shares | Value (000) | ||||||
INDUSTRIALS — 8.28% | ||||||||
Waste Management, Inc.1 | 28,115,000 | $ | 885,341 | |||||
General Electric Co. | 48,950,000 | 876,695 | ||||||
Lockheed Martin Corp. | 9,107,400 | 689,703 | ||||||
Schneider Electric SA | 2,671,803 | 388,326 | ||||||
Norfolk Southern Corp. | 4,000,000 | 302,800 | ||||||
United Technologies Corp. | 3,608,000 | 298,887 | ||||||
R.R. Donnelley & Sons Co.1 | 12,795,400 | 240,681 | ||||||
Eaton Corp. | 5,000,000 | 239,750 | ||||||
Masco Corp.1 | 21,789,951 | 229,884 | ||||||
Hubbell Inc., Class B | 3,430,000 | 203,982 | ||||||
Boeing Co. | 2,700,000 | 190,269 | ||||||
Keppel Corp. Ltd. | 20,570,000 | 189,112 | ||||||
CCR SA, ordinary nominative | 6,016,800 | 181,142 | ||||||
Emerson Electric Co. | 3,300,000 | 161,997 | ||||||
Honeywell International Inc. | 2,191,300 | 116,358 | ||||||
AB SKF, Class B | 4,290,000 | 113,397 | ||||||
Ryanair Holdings PLC (ADR) | 3,929,000 | 106,830 | ||||||
3M Co. | 1,165,000 | 101,518 | ||||||
SembCorp Industries Ltd | 16,689,500 | 70,273 | ||||||
Finmeccanica SpA | 7,000,000 | 53,912 | ||||||
Caterpillar Inc. | 450,000 | 44,456 | ||||||
Delta Air Lines, Inc.2 | 1,661,367 | 13,108 | ||||||
United Continental Holdings, Inc.2 | 60,182 | 1,091 | ||||||
Nortek, Inc.2 | 18,686 | 584 | ||||||
Atrium Corp.2,3,4 | 1,807 | 163 | ||||||
5,700,259 | ||||||||
FINANCIALS — 7.02% | ||||||||
HCP, Inc. | 17,675,800 | 649,232 | ||||||
Weyerhaeuser Co. | 26,212,881 | 523,995 | ||||||
Equity Residential, shares of beneficial interest | 7,142,800 | 441,568 | ||||||
Digital Realty Trust, Inc.1 | 5,790,000 | 354,406 | ||||||
Bank of Nova Scotia | 5,265,000 | 298,558 | ||||||
M&T Bank Corp. | 3,115,000 | 268,638 | ||||||
Hospitality Properties Trust1 | 8,015,000 | 202,379 | ||||||
HSBC Holdings PLC (United Kingdom) | 15,238,722 | 148,706 | ||||||
HSBC Holdings PLC (Hong Kong) | 3,126,382 | 30,707 | ||||||
Toronto-Dominion Bank | 2,150,000 | 172,122 | ||||||
Arthur J. Gallagher & Co.1 | 6,000,000 | 168,720 | ||||||
Industrial and Commercial Bank of China Ltd., Class H | 176,959,000 | 134,642 | ||||||
Prudential PLC | 11,775,000 | 133,364 | ||||||
Citigroup Inc. | 3,458,461 | 132,597 | ||||||
Public Storage | 1,050,000 | 125,612 | ||||||
British Land Co. PLC | 11,450,474 | 109,953 | ||||||
Cullen/Frost Bankers, Inc. | 1,900,000 | 102,372 | ||||||
QBE Insurance Group Ltd. | 5,345,000 | 96,301 | ||||||
FirstMerit Corp.1 | 5,495,000 | 80,282 | ||||||
Mercury General Corp. | 2,000,000 | 74,280 | ||||||
Trustmark Corp.1 | 3,257,000 | 70,970 | ||||||
People’s United Financial, Inc. | 5,350,000 | 67,838 | ||||||
Macquarie Korea Infrastructure Fund | 13,654,598 | 63,785 | ||||||
Boardwalk Real Estate Investment Trust | 1,199,000 | 62,833 | ||||||
Northwest Bancshares, Inc. | 4,850,000 | 59,607 | ||||||
New York Community Bancorp, Inc. | 4,160,000 | 56,285 | ||||||
Banco Santander (Brasil) SA, units | 5,530,000 | 51,954 | ||||||
Allianz SE | 350,000 | 45,795 | ||||||
Itaúsa — Investimentos Itaú SA, preferred nominative | 4,745,197 | 31,882 | ||||||
First Niagara Financial Group, Inc. | 2,400,000 | 29,400 | ||||||
City Holding Co. | 741,000 | 23,171 | ||||||
AXA SA | 875,000 | 16,483 | ||||||
CIT Group Inc.2 | 148,263 | 5,892 | ||||||
Itaú Unibanco Holding SA, preferred nominative (ADR) | 36,818 | 750 | ||||||
Pacific Century Financial Corp. | 8,115 | 364 | ||||||
Valley National Bancorp | 13,560 | 178 | ||||||
4,835,621 | ||||||||
CONSUMER STAPLES — 6.91% | ||||||||
Philip Morris International Inc. | 12,895,000 | 917,737 | ||||||
Kraft Foods Inc., Class A | 21,000,821 | 722,008 | ||||||
Unilever NV, depository receipts | 9,295,000 | 302,513 | ||||||
Unilever NV (New York registered) | 5,051,750 | 164,081 | ||||||
Altria Group, Inc. | 16,350,000 | 430,005 | ||||||
Procter & Gamble Co. | 6,670,000 | 410,138 | ||||||
H.J. Heinz Co. | 7,000,000 | 368,480 | ||||||
Sysco Corp. | 9,290,000 | 284,181 | ||||||
General Mills, Inc. | 5,925,000 | 221,299 | ||||||
Hershey Co. | 3,500,000 | 197,540 | ||||||
British American Tobacco PLC | 4,000,000 | 185,189 | ||||||
Coca-Cola Co. | 2,500,000 | 170,025 | ||||||
Tesco PLC | 24,788,828 | 156,024 | ||||||
Coca-Cola Amatil Ltd. | 11,640,441 | 144,507 | ||||||
Reynolds American Inc. | 2,500,000 | 88,000 | ||||||
4,761,727 | ||||||||
ENERGY — 6.67% | ||||||||
Royal Dutch Shell PLC, Class B (ADR) | 10,120,000 | 745,338 | ||||||
Royal Dutch Shell PLC, Class A (ADR) | 6,000,000 | 441,360 | ||||||
Royal Dutch Shell PLC, Class B | 3,797,147 | 139,584 | ||||||
Chevron Corp. | 10,835,000 | 1,127,057 | ||||||
Spectra Energy Corp | 20,150,500 | 544,467 | ||||||
Crescent Point Energy Corp. | 10,955,000 | 492,456 | ||||||
TOTAL SA (ADR) | 4,035,000 | 218,172 | ||||||
TOTAL SA | 3,755,000 | 203,844 | ||||||
ConocoPhillips | 5,000,000 | 359,950 | ||||||
Penn West Petroleum Ltd. | 10,775,000 | 239,983 | ||||||
Diamond Offshore Drilling, Inc. | 1,255,000 | 85,127 | ||||||
4,597,338 | ||||||||
HEALTH CARE — 6.39% | ||||||||
Bristol-Myers Squibb Co. | 50,405,000 | 1,444,607 | ||||||
Merck & Co., Inc. | 37,742,166 | 1,288,140 | ||||||
Pfizer Inc | 32,850,000 | 632,034 | ||||||
Eli Lilly and Co. | 12,400,000 | 474,920 | ||||||
Johnson & Johnson | 4,300,000 | 278,597 | ||||||
AstraZeneca PLC (United Kingdom) | 3,500,000 | 170,801 | ||||||
GlaxoSmithKline PLC | 3,605,000 | 80,714 | ||||||
Novartis AG (ADR) | 500,000 | 30,600 | ||||||
4,400,413 | ||||||||
TELECOMMUNICATION SERVICES — 6.37% | ||||||||
Verizon Communications Inc. | 46,507,500 | 1,641,250 | ||||||
Telstra Corp. Ltd. | 170,670,000 | 560,619 | ||||||
AT&T Inc. | 18,424,621 | 539,104 | ||||||
France Télécom SA | 21,340,000 | 442,780 | ||||||
Koninklijke KPN NV | 28,067,263 | 401,121 | ||||||
Portugal Telecom, SGPS, SA1 | 46,135,276 | 400,137 | ||||||
CenturyLink, Inc. | 4,739,582 | 175,886 | ||||||
Bell Aliant Inc. | 2,986,600 | 86,586 | ||||||
Vodafone Group PLC | 30,000,000 | 84,699 | ||||||
Bezeq — The Israel Telecommunication Corp. Ltd. | 19,539,900 | 47,677 | ||||||
Sprint Nextel Corp., Series 12 | 760,501 | 3,217 | ||||||
American Tower Corp., Class A2 | 42,271 | 2,221 | ||||||
4,385,297 | ||||||||
CONSUMER DISCRETIONARY — 5.49% | ||||||||
Home Depot, Inc. | 33,695,000 | 1,176,966 | ||||||
McDonald’s Corp. | 8,110,000 | 701,353 | ||||||
McGraw-Hill Companies, Inc. | 11,090,000 | 461,344 | ||||||
Time Warner Cable Inc. | 3,661,361 | 268,414 | ||||||
Time Warner Inc. | 5,825,000 | 204,807 | ||||||
Vivendi SA | 6,000,000 | 144,020 | ||||||
J.C. Penney Co., Inc. | 4,500,000 | 138,420 | ||||||
VF Corp. | 1,065,000 | 124,392 | ||||||
Tatts Group Ltd. | 43,150,000 | 109,979 | ||||||
H & M Hennes & Mauritz AB, Class B | 3,054,000 | 104,415 | ||||||
OPAP SA | 5,770,000 | 95,760 | ||||||
Truworths International Ltd. | 7,374,368 | 79,868 | ||||||
Fielmann AG | 625,000 | 65,379 | ||||||
Esprit Holdings Ltd. | 14,185,099 | 41,315 | ||||||
Cooper-Standard Holdings Inc.2,5 | 586,012 | 27,543 | ||||||
Leggett & Platt, Inc. | 1,147,104 | 24,892 | ||||||
Ford Motor Co.2 | 1,089,728 | 13,306 | ||||||
Adelphia Recovery Trust, Series ACC-12 | 19,531,478 | 127 | ||||||
3,782,300 | ||||||||
UTILITIES — 4.99% | ||||||||
Duke Energy Corp. | 41,146,172 | 765,319 | ||||||
National Grid PLC | 65,110,000 | 638,043 | ||||||
Power Assets Holdings Ltd. | 55,138,000 | 456,314 | ||||||
GDF SUEZ | 13,170,121 | 432,038 | ||||||
Snam Rete Gas SpA | 53,108,326 | 306,924 | ||||||
DTE Energy Co. | 5,000,000 | 249,200 | ||||||
PG&E Corp. | 5,000,000 | 207,150 | ||||||
Exelon Corp. | 4,000,000 | 176,280 | ||||||
FirstEnergy Corp. | 3,205,000 | 143,103 | ||||||
DUET Group | 38,369,915 | 65,338 | ||||||
3,439,709 | ||||||||
MATERIALS — 3.41% | ||||||||
E.I. du Pont de Nemours and Co. | 17,115,000 | 880,053 | ||||||
Nucor Corp. | 12,480,000 | 485,347 | ||||||
MeadWestvaco Corp. | 7,820,000 | 243,515 | ||||||
Dow Chemical Co. | 6,700,000 | 233,629 | ||||||
Fletcher Building Ltd. | 28,000,000 | 200,073 | ||||||
Israel Chemicals Ltd. | 9,525,000 | 161,452 | ||||||
Impala Platinum Holdings Ltd. | 2,937,112 | 75,329 | ||||||
Freeport-McMoRan Copper & Gold Inc. | 600,000 | 31,776 | ||||||
Georgia Gulf Corp.2 | 1,235,924 | 24,768 | ||||||
K+S AG | 143,108 | 11,468 | ||||||
2,347,410 | ||||||||
INFORMATION TECHNOLOGY — 3.30% | ||||||||
Microchip Technology Inc.1 | 14,128,000 | 476,820 | ||||||
Automatic Data Processing, Inc. | 8,485,000 | 436,893 | ||||||
Maxim Integrated Products, Inc. | 14,406,000 | 330,762 | ||||||
KLA-Tencor Corp. | 8,190,000 | 326,126 | ||||||
Paychex, Inc. | 10,155,182 | 286,681 | ||||||
HTC Corp. | 4,090,275 | 121,706 | ||||||
Intel Corp. | 5,450,000 | 121,698 | ||||||
Nintendo Co., Ltd. | 630,000 | 100,574 | ||||||
Microsoft Corp. | 2,550,000 | 69,870 | ||||||
2,271,130 | ||||||||
MISCELLANEOUS — 4.31% | ||||||||
Other common stocks in initial period of acquisition | 2,968,631 | |||||||
Total common stocks (cost: $39,537,047,000) | 43,489,835 | |||||||
Preferred stocks — 0.49% | ||||||||
FINANCIALS — 0.32% | ||||||||
Vornado Realty Trust, Series I, 6.625% | 3,380,000 | 83,486 | ||||||
Ally Financial Inc., Series G, 7.00%5 | 54,454 | 49,475 | ||||||
HSBC Holdings PLC, Series 2, 8.00% | 2,105,000 | 57,493 | ||||||
Public Storage, Inc., Series F, 6.45% | 1,000,000 | 25,080 | ||||||
Fannie Mae, Series S, 8.25% noncumulative2 | 1,511,450 | 3,569 | ||||||
219,103 | ||||||||
MISCELLANEOUS — 0.17% | ||||||||
Other preferred stocks in initial period of acquisition | 119,445 | |||||||
Total preferred stocks (cost: $349,041,000) | 338,548 | |||||||
Warrants — 0.00% | ||||||||
MISCELLANEOUS — 0.00% | ||||||||
Other warrants in initial period of acquisition | 1,559 | |||||||
Total warrants (cost: $32,681,000) | 1,559 | |||||||
Shares or | Value | |||||||
Convertible securities — 1.18% | principal amount | (000 | ) | |||||
CONSUMER DISCRETIONARY — 0.33% | ||||||||
General Motors Co., Series B, 4.75% convertible preferred 2013 | 4,500,000 | $ | 207,945 | |||||
MGM Resorts International 4.25% convertible notes 2015 | $ | 17,037,000 | 19,401 | |||||
227,346 | ||||||||
ENERGY — 0.24% | ||||||||
Apache Corp., Series D, 6.00% convertible preferred 2013 | 2,530,000 | 164,804 | ||||||
INDUSTRIALS — 0.18% | ||||||||
United Continental Holdings, Inc. 6.00% convertible notes 2029 | $ | 15,000,000 | 33,862 | |||||
United Continental Holdings, Inc. 4.50% convertible notes 2021 | $ | 72,600,000 | 65,340 | |||||
United Continental Holdings, Inc. 4.50% convertible debentures 2015 | $ | 2,500,000 | 3,066 | |||||
AMR Corp. 6.25% convertible notes 2014 | $ | 26,400,000 | 22,935 | |||||
125,203 | ||||||||
UTILITIES — 0.12% | ||||||||
PPL Corp. 9.50% convertible preferred 2013, units | 1,463,500 | 82,088 | ||||||
MATERIALS — 0.10% | ||||||||
Alcoa Inc. 5.25% convertible notes 2014 | $ | 21,500,000 | 51,089 | |||||
Sino-Forest Corp. 4.25% convertible notes 20165 | $ | 30,000,000 | 17,915 | |||||
69,004 | ||||||||
INFORMATION TECHNOLOGY — 0.09% | ||||||||
Advanced Micro Devices, Inc. 6.00% convertible notes 2015 | $ | 58,420,000 | 59,735 | |||||
TELECOMMUNICATION SERVICES — 0.05% | ||||||||
Clearwire Corp. 8.25% convertible notes 20405 | $ | 28,000,000 | 18,935 | |||||
Leap Wireless International, Inc. 4.50% convertible notes 2014 | $ | 17,800,000 | 16,999 | |||||
35,934 | ||||||||
CONSUMER STAPLES — 0.04% | ||||||||
Bunge Ltd. 4.875% convertible preferred | 272,700 | 27,815 | ||||||
FINANCIALS — 0.03% | ||||||||
Alexandria Real Estate Equities, Inc. 3.70% convertible notes 20275 | $ | 19,920,000 | 20,194 | |||||
Total convertible securities (cost: $770,549,000) | 812,123 | |||||||
Principal amount | ||||||||
Bonds & notes — 30.49% | (000 | ) | ||||||
FINANCIALS — 6.20% | ||||||||
CIT Group Inc., Series A, 7.00% 20146 | $ | 38,657 | 38,995 | |||||
CIT Group Inc., Term Loan 3, 6.25% 20156,7,8 | 47,317 | 47,512 | ||||||
CIT Group Inc., Series A, 7.00% 2015 | 120,843 | 121,448 | ||||||
CIT Group Inc., Series A, 7.00% 2016 | 90,340 | 90,679 | ||||||
Liberty Mutual Group Inc. 6.50% 20355 | 25,365 | 25,085 | ||||||
Liberty Mutual Group Inc., Series B, 7.00% 20675,7 | 12,690 | 12,364 | ||||||
Liberty Mutual Group Inc., Series A, 7.80% 20875,7 | 74,415 | 75,903 | ||||||
Liberty Mutual Group Inc., Series C, 10.75% 20885,7 | 91,185 | 121,504 | ||||||
Wells Fargo & Co. 3.676% 2016 | 19,630 | 20,642 | ||||||
Wells Fargo & Co. 4.60% 2021 | 82,000 | 85,519 | ||||||
Wells Fargo & Co., Series K, junior subordinated 7.98% (undated)7 | 92,695 | 99,763 | ||||||
Realogy Corp., Letter of Credit, 3.202% 20166,7,8 | 8,500 | 7,705 | ||||||
Realogy Corp., Term Loan B, 4.518% 20166,7,8 | 72,214 | 65,457 | ||||||
Realogy Corp., Second Lien Term Loan A, 13.50% 20176,8 | 51,550 | 54,815 | ||||||
Realogy Corp. 7.875% 20195 | 62,515 | 61,890 | ||||||
JPMorgan Chase & Co. 2.60% 2016 | 21,070 | 20,971 | ||||||
JPMorgan Chase & Co. 3.15% 2016 | 9,430 | 9,540 | ||||||
JPMorgan Chase & Co. 3.45% 2016 | 4,813 | 4,930 | ||||||
JPMorgan Chase & Co. 4.625% 2021 | 3,755 | 3,837 | ||||||
JPMorgan Chase & Co., Series I, junior subordinated 7.90% (undated)7 | 134,477 | 144,636 | ||||||
Westfield Group 5.40% 20125 | 4,350 | 4,564 | ||||||
Westfield Capital Corp. Ltd., WT Finance (Australia) Pty Ltd. and WEA Finance LLC 5.125% 20145 | 18,485 | 20,234 | ||||||
Westfield Group 7.50% 20145 | 5,555 | 6,404 | ||||||
Westfield Group 5.75% 20155 | 10,250 | 11,529 | ||||||
Westfield Group 5.70% 20165 | 44,075 | 49,471 | ||||||
Westfield Group 7.125% 20185 | 41,685 | 49,331 | ||||||
WEA Finance LLC 4.625% 20215 | 20,000 | 20,229 | ||||||
Simon Property Group, LP 6.75% 2014 | 5,310 | 6,024 | ||||||
Simon Property Group, LP 5.25% 2016 | 74,340 | 83,126 | ||||||
Simon Property Group, LP 6.10% 2016 | 4,250 | 4,936 | ||||||
Simon Property Group, LP 5.875% 2017 | 22,265 | 25,674 | ||||||
Simon Property Group, LP 6.125% 2018 | 25,115 | 28,744 | ||||||
Simon Property Group, LP 10.35% 2019 | 5,000 | 7,057 | ||||||
Bank of America Corp., Series L, 3.625% 2016 | 12,025 | 12,087 | ||||||
Bank of America Corp. 3.75% 2016 | 15,975 | 16,059 | ||||||
Bank of America Corp. 5.30% 2017 | 45,500 | 47,052 | ||||||
Bank of America Corp. 5.75% 2017 | 8,100 | 8,673 | ||||||
Bank of America Corp. 5.625% 2020 | 10,190 | 10,607 | ||||||
Bank of America Corp. 5.00% 2021 | 5,590 | 5,544 | ||||||
Bank of America Corp. 5.875% 2021 | 10,665 | 11,189 | ||||||
NB Capital Trust II 7.83% 2026 | 5,575 | 5,686 | ||||||
NB Capital Trust IV 8.25% 2027 | 4,000 | 4,125 | ||||||
Bank of America Corp., Series M, junior subordinated 8.125% noncumulative (undated)7 | 30,924 | 31,888 | ||||||
Prologis, Inc. 7.625% 2014 | 11,000 | 12,586 | ||||||
Prologis, Inc. 6.25% 2017 | 8,900 | 10,015 | ||||||
Prologis, Inc. 6.625% 2018 | 54,675 | 62,060 | ||||||
Prologis, Inc. 7.375% 2019 | 22,100 | 25,970 | ||||||
Prologis, Inc. 6.875% 2020 | 32,975 | 37,436 | ||||||
SMFG Preferred Capital USD 3 Ltd., junior subordinated 9.50% (undated)5,7 | 116,330 | 137,996 | ||||||
Zions Bancorporation 5.65% 2014 | 18,810 | 19,586 | ||||||
Zions Bancorporation 7.75% 2014 | 8,825 | 9,730 | ||||||
Zions Bancorporation 5.50% 2015 | 40,017 | 41,648 | ||||||
Zions Bancorporation 6.00% 2015 | 60,872 | 63,124 | ||||||
HBOS PLC 6.75% 20185 | 62,399 | 62,633 | ||||||
LBG Capital No.1 PLC, Series 2, 7.875% 20205 | 65,054 | 61,639 | ||||||
HBOS PLC 6.00% 20335 | 1,055 | 786 | ||||||
HBOS Capital Funding LP 6.071%5,7 | 5,000 | 4,150 | ||||||
Citigroup Inc. 1.111% 20137 | 35,000 | 35,017 | ||||||
Citigroup Inc. 3.953% 2016 | 34,600 | 35,997 | ||||||
Citigroup Capital XXI 8.30% 20777 | 54,695 | 56,336 | ||||||
Société Générale 1.296% 20145,7 | 20,000 | 19,599 | ||||||
Société Générale 3.10% 20155 | 10,000 | 9,979 | ||||||
Société Générale 3.50% 20165 | 10,000 | 9,954 | ||||||
Société Générale 5.75% 20165 | 12,550 | 12,697 | ||||||
Société Générale 5.20% 20215 | 16,250 | 15,972 | ||||||
Société Générale, junior subordinated 5.922% (undated)5,7 | 45,073 | 39,303 | ||||||
Goldman Sachs Group, Inc. 3.625% 2016 | 38,200 | 38,711 | ||||||
Goldman Sachs Group, Inc. 5.25% 2021 | 50,750 | 51,905 | ||||||
Goldman Sachs Group, Inc. 6.25% 2041 | 6,000 | 6,055 | ||||||
Springleaf Finance Corp., Series I, 5.85% 2013 | 9,250 | 9,222 | ||||||
Springleaf Finance Corp., Series I, 5.40% 2015 | 48,100 | 44,733 | ||||||
Springleaf Finance Corp., Term Loan B, 5.50% 20176,7,8 | 18,545 | 18,138 | ||||||
Springleaf Finance Corp., Series J, 6.90% 2017 | 15,000 | 14,119 | ||||||
Regions Financial Corp. 6.375% 2012 | 8,913 | 9,135 | ||||||
Regions Financial Corp. 7.75% 2014 | 28,340 | 30,236 | ||||||
Regions Financial Corp. 5.20% 2015 | 3,115 | 3,028 | ||||||
Regions Financial Corp. 5.75% 2015 | 14,761 | 14,681 | ||||||
Regions Bank 7.50% 2018 | 17,900 | 18,749 | ||||||
Royal Bank of Scotland PLC 3.40% 2013 | 10,000 | 10,214 | ||||||
Royal Bank of Scotland Group PLC 5.00% 2013 | 2,706 | 2,744 | ||||||
Royal Bank of Scotland PLC 3.95% 2015 | 10,000 | 10,040 | ||||||
Royal Bank of Scotland PLC 4.875% 2015 | 9,000 | 9,348 | ||||||
Royal Bank of Scotland Group PLC 5.05% 2015 | 4,977 | 4,911 | ||||||
Royal Bank of Scotland Group PLC 4.375% 2016 | 1,250 | 1,265 | ||||||
Royal Bank of Scotland Group PLC 4.70% 2018 | 9,023 | 7,941 | ||||||
RBS Capital Trust II 6.425% noncumulative trust7,9 | 12,350 | 8,707 | ||||||
Royal Bank of Scotland Group PLC, junior subordinated 6.99% (undated)5,7 | 10,280 | 9,175 | ||||||
Royal Bank of Scotland Group PLC, Series U, junior subordinated 7.64% (undated)7 | 8,800 | 6,578 | ||||||
Mizuho Capital Investment (USD) 2 Ltd, junior subordinated 14.95% (undated)5,7 | 55,766 | 70,825 | ||||||
Kimco Realty Corp. 6.00% 2012 | 3,250 | 3,434 | ||||||
Kimco Realty Corp., Series C, 4.82% 2014 | 3,000 | 3,218 | ||||||
Kimco Realty Corp., Series C, 4.904% 2015 | 4,500 | 4,891 | ||||||
Kimco Realty Corp., Series C, 5.783% 2016 | 15,000 | 16,847 | ||||||
Kimco Realty Corp. 5.70% 2017 | 23,485 | 26,433 | ||||||
Kimco Realty Corp. 4.30% 2018 | 3,000 | 3,138 | ||||||
Kimco Realty Corp. 6.875% 2019 | 10,000 | 11,841 | ||||||
PNC Preferred Funding Trust I, junior subordinated 6.517% (undated)5,7 | 23,800 | 20,146 | ||||||
PNC Preferred Funding Trust III, junior subordinated 8.70% (undated)5,7 | 40,700 | 42,749 | ||||||
National City Preferred Capital Trust I 12.00% (undated)7 | 5,640 | 6,190 | ||||||
International Lease Finance Corp. 5.00% 2012 | 4,245 | 4,319 | ||||||
International Lease Finance Corp. 8.625% 2015 | 38,500 | 42,591 | ||||||
International Lease Finance Corp. 5.75% 2016 | 20,000 | 19,979 | ||||||
Developers Diversified Realty Corp. 5.375% 2012 | 4,500 | 4,631 | ||||||
Developers Diversified Realty Corp. 5.50% 2015 | 15,776 | 17,020 | ||||||
Developers Diversified Realty Corp. 9.625% 2016 | 3,170 | 3,883 | ||||||
Developers Diversified Realty Corp. 7.50% 2017 | 21,850 | 25,254 | ||||||
Developers Diversified Realty Corp. 4.75% 2018 | 6,750 | 6,855 | ||||||
Developers Diversified Realty Corp. 7.875% 2020 | 5,575 | 6,608 | ||||||
Standard Chartered PLC 3.85% 20155 | 3,400 | 3,567 | ||||||
Standard Chartered PLC 3.20% 20165 | 10,000 | 10,096 | ||||||
Standard Chartered Bank 6.40% 20175 | 35,000 | 39,162 | ||||||
Standard Chartered PLC, junior subordinated 6.409% (undated)5,7 | 10,000 | 9,549 | ||||||
MetLife Global Funding I 5.125% 20135 | 12,750 | 13,558 | ||||||
MetLife Global Funding I 2.50% 20155 | 11,000 | 11,168 | ||||||
MetLife Capital Trust IV, junior subordinated 7.875% 20675,7 | 27,930 | 30,770 | ||||||
MetLife Capital Trust X, junior subordinated 9.25% 20685,7 | 1,500 | 1,868 | ||||||
MetLife Inc., junior subordinated 10.75% 20697 | 2,500 | 3,559 | ||||||
Hospitality Properties Trust 6.75% 20131 | 12,650 | 13,212 | ||||||
Hospitality Properties Trust 5.125% 20151 | 2,160 | 2,301 | ||||||
Hospitality Properties Trust 6.30% 20161 | 13,577 | 15,082 | ||||||
Hospitality Properties Trust 5.625% 20171 | 10,169 | 10,673 | ||||||
Hospitality Properties Trust 6.70% 20181 | 16,175 | 17,695 | ||||||
Morgan Stanley, Series F, 2.875% 2014 | 10,000 | 10,203 | ||||||
Morgan Stanley 3.80% 2016 | 14,500 | 14,616 | ||||||
Morgan Stanley, Series F, 5.625% 2019 | 16,000 | 16,717 | ||||||
Morgan Stanley, Series F, 5.75% 2021 | 12,000 | 12,656 | ||||||
Synovus Financial Corp. 4.875% 2013 | 11,880 | 11,375 | ||||||
Synovus Financial Corp. 5.125% 2017 | 44,698 | 39,669 | ||||||
Rouse Co. 7.20% 2012 | 28,039 | 29,301 | ||||||
Rouse Co. 5.375% 2013 | 2,770 | 2,798 | ||||||
Rouse Co. 6.75% 20135 | 13,400 | 14,003 | ||||||
Barclays Bank PLC 2.50% 2013 | 4,625 | 4,704 | ||||||
Barclays Bank PLC 5.125% 2020 | 5,500 | 5,658 | ||||||
Barclays Bank PLC 5.14% 2020 | 4,750 | 4,545 | ||||||
Barclays Bank PLC, junior subordinated 7.434% (undated)5,7 | 28,574 | 28,788 | ||||||
UnumProvident Finance Co. PLC 6.85% 20155 | 28,500 | 32,334 | ||||||
Unum Group 7.125% 2016 | 6,740 | 7,862 | ||||||
Intesa Sanpaolo SpA 2.658% 20145,7 | 30,000 | 29,510 | ||||||
Intesa Sanpaolo SpA 6.50% 20215 | 9,250 | 9,590 | ||||||
HSBC Bank PLC 2.00% 20145 | 12,500 | 12,693 | ||||||
HSBC Bank PLC 3.50% 20155 | 12,000 | 12,478 | ||||||
HSBC Capital Funding LP, Series 2, 10.176% noncumulative step-up5,7 | 10,000 | 13,100 | ||||||
Catlin Insurance Ltd., junior subordinated 7.249% (undated)5,7 | 39,900 | 38,005 | ||||||
Ally Financial Inc. 6.875% 2011 | 16,255 | 16,373 | ||||||
Ally Financial Inc. 6.875% 2012 | 1,200 | 1,242 | ||||||
Ally Financial Inc. 7.00% 2012 | 15,839 | 16,235 | ||||||
Nationwide Mutual Insurance Co. 5.81% 20245,7 | 8,150 | 8,048 | ||||||
Nationwide Mutual Insurance Co. 9.375% 20395 | 20,000 | 25,613 | ||||||
HSBK (Europe) BV 7.25% 20175 | 30,570 | 31,525 | ||||||
ERP Operating LP 5.50% 2012 | 4,000 | 4,202 | ||||||
ERP Operating LP 6.625% 2012 | 2,000 | 2,071 | ||||||
ERP Operating LP 5.20% 2013 | 2,500 | 2,656 | ||||||
ERP Operating LP 5.25% 2014 | 2,000 | 2,203 | ||||||
ERP Operating LP 6.584% 2015 | 2,705 | 3,131 | ||||||
ERP Operating LP 5.75% 2017 | 4,000 | 4,539 | ||||||
ERP Operating LP 7.125% 2017 | 10,000 | 11,934 | ||||||
QBE Capital Funding III LP 7.25% 20415 | 11,500 | 11,741 | ||||||
QBE Capital Funding II LP 6.797% (undated)5,7 | 18,715 | 17,787 | ||||||
Host Hotels & Resorts, LP, Series S, 6.875% 2014 | 8,750 | 9,023 | ||||||
Host Marriott, LP, Series O, 6.375% 2015 | 950 | 974 | ||||||
Host Hotels & Resorts, LP, Series Q, 6.75% 2016 | 7,800 | 8,083 | ||||||
Host Hotels & Resorts LP 9.00% 2017 | 900 | 1,014 | ||||||
Host Hotels & Resorts LP 5.875% 20195 | 10,175 | 10,340 | ||||||
Genworth Financial, Inc. 7.625% 2021 | 11,200 | 10,724 | ||||||
Genworth Financial, Inc., junior subordinated 6.15% 20667 | 27,500 | 18,150 | ||||||
Lazard Group LLC 7.125% 2015 | 25,187 | 28,430 | ||||||
BNP Paribas 1.146% 20147 | 10,000 | 9,879 | ||||||
BNP Paribas 3.60% 2016 | 10,000 | 10,171 | ||||||
BNP Paribas 5.00% 2021 | 7,000 | 7,203 | ||||||
UBS AG 1.253% 20147 | 1,000 | 1,002 | ||||||
UBS AG 2.25% 2014 | 10,000 | 10,132 | ||||||
UBS AG 5.875% 2017 | 13,500 | 15,087 | ||||||
UBS AG 4.875% 2020 | 1,000 | 1,028 | ||||||
NASDAQ OMX Group, Inc. 5.25% 2018 | 25,250 | 26,415 | ||||||
AXA SA, Series B, junior subordinated 6.379% (undated)5,7 | 11,530 | 9,801 | ||||||
AXA SA, junior subordinated 6.463% (undated)5,7 | 18,717 | 15,722 | ||||||
Capital One Financial Corp. 3.15% 2016 | 10,000 | 10,049 | ||||||
Capital One Capital V 10.25% 2039 | 10,805 | 11,499 | ||||||
New York Life Global Funding 4.65% 20135 | 19,500 | 20,839 | ||||||
HCP, Inc. 3.75% 2016 | 20,000 | 20,735 | ||||||
Monumental Global Funding 5.50% 20135 | 10,000 | 10,703 | ||||||
Monumental Global Funding III 0.449% 20145,7 | 8,000 | 7,751 | ||||||
Monumental Global Funding III 5.25% 20145 | 1,500 | 1,611 | ||||||
BBVA Bancomer SA 4.50% 20165 | 9,175 | 9,416 | ||||||
BBVA Bancomer SA 6.50% 20215 | 7,375 | 7,670 | ||||||
ZFS Finance (USA) Trust II, junior subordinated 6.45% 20655,7 | 12,500 | 12,812 | ||||||
ZFS Finance (USA) Trust V, junior subordinated 6.50% 20675,7 | 3,011 | 3,011 | ||||||
PRICOA Global Funding I 5.30% 20135 | 2,500 | 2,712 | ||||||
Prudential Holdings, LLC, Series C, 8.695% 20235,6 | 10,250 | 12,989 | ||||||
American Express Co. 6.15% 2017 | 12,610 | 14,562 | ||||||
ACE INA Holdings Inc. 5.875% 2014 | 2,500 | 2,812 | ||||||
ACE INA Holdings Inc. 2.60% 2015 | 9,945 | 10,106 | ||||||
Nordea Bank 2.125% 20145 | 10,000 | 10,122 | ||||||
Nordea Bank, Series 2, 3.70% 20145 | 2,000 | 2,106 | ||||||
CNA Financial Corp. 5.85% 2014 | 5,625 | 6,152 | ||||||
CNA Financial Corp. 7.35% 2019 | 3,000 | 3,511 | ||||||
CNA Financial Corp. 5.875% 2020 | 2,000 | 2,149 | ||||||
Principal Life Insurance Co. 5.30% 2013 | 10,000 | 10,744 | ||||||
Lincoln National Corp. 5.65% 2012 | 10,000 | 10,458 | ||||||
Berkshire Hathaway Inc. 2.125% 2013 | 5,000 | 5,121 | ||||||
Berkshire Hathaway Inc. 3.20% 2015 | 5,000 | 5,297 | ||||||
Bank of New York Mellon Corp., Series G, 2.50% 2016 | 10,000 | 10,310 | ||||||
Westpac Banking Corp. 3.00% 2015 | 10,000 | 10,220 | ||||||
Credit Suisse Group AG 2.20% 2014 | 10,000 | 10,211 | ||||||
ANZ National (International) Ltd. 3.125% 20155 | 10,000 | 10,192 | ||||||
Bank of Tokyo-Mitsubishi, Ltd. 2.45% 20155 | 10,000 | 10,132 | ||||||
Toyota Motor Credit Corp. 1.375% 2013 | 10,000 | 10,109 | ||||||
Santander Issuances, SA Unipersonal 6.50% 20195,7 | 9,400 | 9,440 | ||||||
Ford Motor Credit Co. 7.25% 2011 | 7,500 | 7,592 | ||||||
Ford Motor Credit Co. 8.00% 2016 | 1,500 | 1,722 | ||||||
Boston Properties, Inc. 5.875% 2019 | 8,000 | 9,029 | ||||||
VEB Finance Ltd. 6.902% 20205 | 3,380 | 3,676 | ||||||
VEB Finance Ltd. 6.80% 20255 | 3,000 | 3,143 | ||||||
Brandywine Operating Partnership, LP 5.40% 2014 | 6,000 | 6,465 | ||||||
UDR, Inc. 5.00% 2012 | 2,500 | 2,536 | ||||||
UDR, Inc., Series A, 5.25% 2015 | 3,000 | 3,245 | ||||||
Development Bank of Kazakhstan 5.50% 2015 | 3,000 | 3,135 | ||||||
Development Bank of Kazakhstan 5.50% 20155 | 2,055 | 2,147 | ||||||
First Tennessee Bank 5.05% 2015 | 3,400 | 3,588 | ||||||
ACE Cash Express, Inc. 11.00% 20195 | 2,675 | 2,708 | ||||||
Allstate Corp., Series B, junior subordinated 6.125% 20677 | 2,445 | 2,399 | ||||||
Nationwide Financial Services, Inc., junior subordinated 6.75% 20677 | 2,480 | 2,326 | ||||||
TIAA Global Markets 4.95% 20135 | 2,000 | 2,152 | ||||||
Community Choice Financial 10.75% 20195 | 1,475 | 1,523 | ||||||
Ambac Financial Group, Inc. 6.15% 20877,9 | 8,405 | 95 | ||||||
4,266,503 | ||||||||
MORTGAGE-BACKED OBLIGATIONS6 — 4.55% | ||||||||
Fannie Mae 4.89% 2012 | 10,000 | 10,031 | ||||||
Fannie Mae 5.00% 2018 | 5,139 | 5,514 | ||||||
Fannie Mae 5.50% 2018 | 151 | 164 | ||||||
Fannie Mae 5.50% 2020 | 15,643 | 16,983 | ||||||
Fannie Mae 6.00% 2021 | 570 | 622 | ||||||
Fannie Mae, Series 2003-48, Class TJ, 4.50% 2022 | 6,140 | 6,347 | ||||||
Fannie Mae 4.50% 2024 | 8,127 | 8,659 | ||||||
Fannie Mae 5.50% 2024 | 862 | 934 | ||||||
Fannie Mae 3.00% 2025 | 3,109 | 3,140 | ||||||
Fannie Mae 3.50% 2025 | 27,027 | 27,830 | ||||||
Fannie Mae 3.50% 2025 | 19,511 | 20,091 | ||||||
Fannie Mae 3.50% 2025 | 14,355 | 14,781 | ||||||
Fannie Mae 3.50% 2025 | 14,076 | 14,495 | ||||||
Fannie Mae 3.50% 2025 | 11,774 | 12,124 | ||||||
Fannie Mae 3.50% 2025 | 10,295 | 10,601 | ||||||
Fannie Mae 3.50% 2025 | 10,076 | 10,375 | ||||||
Fannie Mae 3.50% 2025 | 9,230 | 9,505 | ||||||
Fannie Mae 3.50% 2025 | 6,759 | 6,960 | ||||||
Fannie Mae 3.50% 2025 | 1,918 | 1,975 | ||||||
Fannie Mae 3.50% 2025 | 1,073 | 1,105 | ||||||
Fannie Mae 3.50% 2025 | 665 | 685 | ||||||
Fannie Mae 3.50% 2025 | 495 | 510 | ||||||
Fannie Mae 3.50% 2025 | 481 | 495 | ||||||
Fannie Mae 4.00% 2025 | 28,113 | 29,520 | ||||||
Fannie Mae 4.50% 2025 | 9,205 | 9,802 | ||||||
Fannie Mae 4.50% 2025 | 4,638 | 4,949 | ||||||
Fannie Mae 4.50% 2025 | 4,526 | 4,820 | ||||||
Fannie Mae 4.50% 2025 | 4,341 | 4,622 | ||||||
Fannie Mae, Series 2001-4, Class GA, 9.844% 20257 | 359 | 419 | ||||||
Fannie Mae, Series 2001-4, Class NA, 11.597% 20257 | 21 | 23 | ||||||
Fannie Mae 3.00% 2026 | 31,906 | 32,228 | ||||||
Fannie Mae 3.00% 2026 | 376 | 380 | ||||||
Fannie Mae 3.50% 2026 | 11,547 | 11,886 | ||||||
Fannie Mae 4.50% 2026 | 11,650 | 12,387 | ||||||
Fannie Mae 6.00% 2026 | 9,611 | 10,622 | ||||||
Fannie Mae 7.00% 2026 | 1,364 | 1,584 | ||||||
Fannie Mae 6.00% 2028 | 12,724 | 14,024 | ||||||
Fannie Mae 7.00% 2028 | 3,534 | 4,115 | ||||||
Fannie Mae 7.00% 2028 | 581 | 676 | ||||||
Fannie Mae, Series 2001-20, Class E, 9.616% 20317 | 326 | 377 | ||||||
Fannie Mae 5.50% 2033 | 2,082 | 2,271 | ||||||
Fannie Mae 5.00% 2035 | 55,897 | 59,906 | ||||||
Fannie Mae 5.50% 2035 | 2,032 | 2,215 | ||||||
Fannie Mae 5.50% 2036 | 17,073 | 18,610 | ||||||
Fannie Mae, Series 2006-43, Class PX, 6.00% 2036 | 5,172 | 5,786 | ||||||
Fannie Mae, Series 2007-33, Class HE, 5.50% 2037 | 15,777 | 17,486 | ||||||
Fannie Mae 5.606% 20377 | 6,775 | 7,206 | ||||||
Fannie Mae 6.00% 2037 | 121,369 | 133,567 | ||||||
Fannie Mae 6.00% 2037 | 30,537 | 33,606 | ||||||
Fannie Mae 6.00% 2037 | 17,015 | 18,805 | ||||||
Fannie Mae 6.00% 2037 | 12,387 | 13,640 | ||||||
Fannie Mae 6.00% 2037 | 11,938 | 13,130 | ||||||
Fannie Mae, Series 2007-24, Class P, 6.00% 2037 | 11,580 | 12,994 | ||||||
Fannie Mae 6.00% 2037 | 803 | 885 | ||||||
Fannie Mae 6.00% 2037 | 798 | 870 | ||||||
Fannie Mae 6.50% 2037 | 6,480 | 7,194 | ||||||
Fannie Mae 6.50% 2037 | 5,130 | 5,696 | ||||||
Fannie Mae 6.50% 2037 | 4,391 | 4,907 | ||||||
Fannie Mae 6.50% 2037 | 4,114 | 4,581 | ||||||
Fannie Mae 7.00% 2037 | 2,647 | 2,948 | ||||||
Fannie Mae 7.00% 2037 | 2,032 | 2,264 | ||||||
Fannie Mae 7.50% 2037 | 1,813 | 2,030 | ||||||
Fannie Mae 7.50% 2037 | 1,087 | 1,217 | ||||||
Fannie Mae 7.50% 2037 | 220 | 246 | ||||||
Fannie Mae 7.50% 2037 | 175 | 201 | ||||||
Fannie Mae 7.50% 2037 | 165 | 185 | ||||||
Fannie Mae 8.00% 2037 | 106 | 120 | ||||||
Fannie Mae 5.50% 2038 | 5,139 | 5,581 | ||||||
Fannie Mae 6.00% 2038 | 19,015 | 20,938 | ||||||
Fannie Mae 6.00% 2038 | 15,145 | 16,658 | ||||||
Fannie Mae 6.00% 2038 | 11,691 | 12,895 | ||||||
Fannie Mae 6.00% 2038 | 10,732 | 11,838 | ||||||
Fannie Mae 6.00% 2038 | 8,187 | 9,030 | ||||||
Fannie Mae 6.00% 2038 | 6,088 | 6,715 | ||||||
Fannie Mae 4.50% 2039 | 69,782 | 73,161 | ||||||
Fannie Mae 6.00% 2039 | 5,316 | 5,850 | ||||||
Fannie Mae 3.50% 2040 | 28,037 | 27,455 | ||||||
Fannie Mae 3.50% 2040 | 19,787 | 19,376 | ||||||
Fannie Mae 3.50% 2040 | 14,326 | 14,029 | ||||||
Fannie Mae 3.50% 2040 | 10,847 | 10,622 | ||||||
Fannie Mae 3.50% 2040 | 8,873 | 8,689 | ||||||
Fannie Mae 3.50% 2040 | 6,785 | 6,644 | ||||||
Fannie Mae 4.00% 2040 | 30,000 | 30,521 | ||||||
Fannie Mae 4.00% 2040 | 24,149 | 24,569 | ||||||
Fannie Mae 4.00% 2040 | 23,965 | 24,381 | ||||||
Fannie Mae 4.00% 2040 | 21,089 | 21,455 | ||||||
Fannie Mae 4.00% 2040 | 18,996 | 19,326 | ||||||
Fannie Mae 4.00% 2040 | 17,243 | 17,543 | ||||||
Fannie Mae 4.00% 2040 | 5,990 | 6,094 | ||||||
Fannie Mae 4.50% 2040 | 29,680 | 31,048 | ||||||
Fannie Mae 4.50% 2040 | 7,402 | 7,743 | ||||||
Fannie Mae 4.50% 2040 | 5,802 | 6,067 | ||||||
Fannie Mae 4.50% 2040 | 3,030 | 3,169 | ||||||
Fannie Mae 4.50% 2040 | 644 | 674 | ||||||
Fannie Mae 4.50% 2040 | 592 | 620 | ||||||
Fannie Mae 4.50% 2040 | 489 | 512 | ||||||
Fannie Mae 4.50% 2040 | 179 | 187 | ||||||
Fannie Mae 4.50% 2040 | 169 | 177 | ||||||
Fannie Mae 4.50% 2040 | 50 | 52 | ||||||
Fannie Mae 4.50% 2040 | 30 | 31 | ||||||
Fannie Mae 5.00% 2040 | 21,774 | 23,278 | ||||||
Fannie Mae 5.00% 2040 | 688 | 735 | ||||||
Fannie Mae 6.00% 2040 | 13,541 | 14,885 | ||||||
Fannie Mae 3.50% 2041 | 16,882 | 16,531 | ||||||
Fannie Mae 3.50% 2041 | 16,228 | 15,891 | ||||||
Fannie Mae 3.50% 2041 | 14,150 | 13,857 | ||||||
Fannie Mae 3.50% 2041 | 7,895 | 7,731 | ||||||
Fannie Mae 3.50% 2041 | 5,500 | 5,380 | ||||||
Fannie Mae 4.00% 2041 | 47,799 | 48,629 | ||||||
Fannie Mae 4.00% 2041 | 20,400 | 20,748 | ||||||
Fannie Mae 4.50% 2041 | 131,356 | 137,346 | ||||||
Fannie Mae 4.50% 2041 | 80,552 | 84,225 | ||||||
Fannie Mae 4.50% 2041 | 51,997 | 54,368 | ||||||
Fannie Mae 4.50% 2041 | 26,000 | 27,146 | ||||||
Fannie Mae 4.50% 2041 | 13,683 | 14,307 | ||||||
Fannie Mae 4.50% 2041 | 10,299 | 10,768 | ||||||
Fannie Mae 4.50% 2041 | 8,986 | 9,396 | ||||||
Fannie Mae 4.50% 2041 | 7,577 | 7,923 | ||||||
Fannie Mae 4.50% 2041 | 6,608 | 6,921 | ||||||
Fannie Mae 4.50% 2041 | 6,218 | 6,512 | ||||||
Fannie Mae 4.50% 2041 | 4,375 | 4,575 | ||||||
Fannie Mae 4.50% 2041 | 2,486 | 2,599 | ||||||
Fannie Mae 4.50% 2041 | 1,989 | 2,083 | ||||||
Fannie Mae 4.50% 2041 | 935 | 979 | ||||||
Fannie Mae 4.50% 2041 | 685 | 717 | ||||||
Fannie Mae 4.50% 2041 | 496 | 520 | ||||||
Fannie Mae 4.50% 2041 | 126 | 132 | ||||||
Fannie Mae 4.50% 2041 | 97 | 102 | ||||||
Fannie Mae 5.00% 2041 | 30,000 | 32,020 | ||||||
Fannie Mae 5.00% 2041 | 11,699 | 12,569 | ||||||
Fannie Mae 5.00% 2041 | 3,995 | 4,276 | ||||||
Fannie Mae 5.00% 2041 | 1,619 | 1,739 | ||||||
Fannie Mae 5.00% 2041 | 1,171 | 1,251 | ||||||
Fannie Mae 5.00% 2041 | 1,109 | 1,191 | ||||||
Fannie Mae 5.00% 2041 | 809 | 866 | ||||||
Fannie Mae 5.00% 2041 | 720 | 771 | ||||||
Fannie Mae 5.00% 2041 | 682 | 730 | ||||||
Fannie Mae 5.00% 2041 | 675 | 725 | ||||||
Fannie Mae 5.50% 2041 | 105,000 | 113,794 | ||||||
Fannie Mae 6.00% 2041 | 22,881 | 25,165 | ||||||
Fannie Mae 6.50% 2041 | 6,019 | 6,684 | ||||||
Fannie Mae, Series 2001-50, Class BA, 7.00% 2041 | 839 | 939 | ||||||
Fannie Mae, Series 2001-T10, Class A-1, 7.00% 2041 | 713 | 796 | ||||||
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 2041 | 485 | 576 | ||||||
Fannie Mae, Series 2002-W1, Class 2A, 7.158% 20427 | 1,102 | 1,293 | ||||||
Fannie Mae 6.50% 2047 | 2,108 | 2,310 | ||||||
Fannie Mae 6.50% 2047 | 2,101 | 2,303 | ||||||
Fannie Mae 6.50% 2047 | 1,992 | 2,184 | ||||||
Fannie Mae 6.50% 2047 | 1,294 | 1,418 | ||||||
Fannie Mae 6.50% 2047 | 1,021 | 1,119 | ||||||
Fannie Mae 6.50% 2047 | 898 | 984 | ||||||
Fannie Mae 6.50% 2047 | 656 | 719 | ||||||
Fannie Mae 7.00% 2047 | 1,634 | 1,819 | ||||||
Fannie Mae 7.00% 2047 | 1,305 | 1,453 | ||||||
Fannie Mae 7.00% 2047 | 1,118 | 1,245 | ||||||
Fannie Mae 7.00% 2047 | 1,001 | 1,115 | ||||||
Fannie Mae 7.00% 2047 | 163 | 181 | ||||||
Freddie Mac 5.00% 2018 | 3,061 | 3,289 | ||||||
Freddie Mac, Series 2890, Class KT, 4.50% 2019 | 25,425 | 28,173 | ||||||
Freddie Mac, Series 2289, Class NB, 11.079% 20227 | 62 | 70 | ||||||
Freddie Mac 5.00% 2023 | 10,863 | 11,640 | ||||||
Freddie Mac 5.00% 2023 | 10,192 | 10,921 | ||||||
Freddie Mac 5.00% 2023 | 8,562 | 9,174 | ||||||
Freddie Mac 5.00% 2023 | 3,478 | 3,746 | ||||||
Freddie Mac 6.00% 2026 | 1,878 | 2,070 | ||||||
Freddie Mac 6.00% 2027 | 3,065 | 3,378 | ||||||
Freddie Mac 2.477% 20357 | 3,017 | 3,153 | ||||||
Freddie Mac, Series 3061, Class PN, 5.50% 2035 | 3,602 | 4,021 | ||||||
Freddie Mac, Series 3257, Class PA, 5.50% 2036 | 16,563 | 18,381 | ||||||
Freddie Mac, Series 3286, Class JN, 5.50% 2037 | 20,558 | 22,598 | ||||||
Freddie Mac, Series 3312, Class PA, 5.50% 2037 | 16,630 | 18,301 | ||||||
Freddie Mac, Series 3318, Class JT, 5.50% 2037 | 11,630 | 12,777 | ||||||
Freddie Mac, Series 3271, Class OA, 6.00% 2037 | 14,298 | 16,152 | ||||||
Freddie Mac 6.50% 2038 | 11,481 | 12,889 | ||||||
Freddie Mac 6.50% 2038 | 4,247 | 4,726 | ||||||
Freddie Mac 5.00% 2039 | 9,548 | 10,224 | ||||||
Freddie Mac 5.00% 2039 | 7,592 | 8,146 | ||||||
Freddie Mac 5.00% 2039 | 4,288 | 4,580 | ||||||
Freddie Mac 4.00% 2041 | 21,725 | 22,105 | ||||||
Freddie Mac 4.00% 2041 | 10,823 | 11,012 | ||||||
Freddie Mac 4.00% 2041 | 4,972 | 5,059 | ||||||
Freddie Mac 4.00% 2041 | 2,962 | 3,015 | ||||||
Freddie Mac 4.00% 2041 | 383 | 390 | ||||||
Freddie Mac 5.00% 2041 | 3,976 | 4,254 | ||||||
Freddie Mac 5.00% 2041 | 3,232 | 3,458 | ||||||
Freddie Mac 5.00% 2041 | 2,572 | 2,752 | ||||||
Freddie Mac 5.00% 2041 | 1,326 | 1,417 | ||||||
Freddie Mac 5.00% 2041 | 997 | 1,067 | ||||||
Freddie Mac 5.00% 2041 | 767 | 821 | ||||||
Freddie Mac 5.00% 2041 | 666 | 712 | ||||||
Government National Mortgage Assn. 10.00% 2021 | 642 | 762 | ||||||
Government National Mortgage Assn. 10.00% 2025 | 605 | 708 | ||||||
Government National Mortgage Assn. 4.00% 2040 | 102,082 | 105,758 | ||||||
Government National Mortgage Assn. 4.00% 2040 | 5,181 | 5,368 | ||||||
Government National Mortgage Assn. 4.50% 2040 | 4,822 | 5,145 | ||||||
Government National Mortgage Assn. 4.50% 2040 | 1,071 | 1,143 | ||||||
Government National Mortgage Assn. 5.00% 2040 | 5,213 | 5,702 | ||||||
Government National Mortgage Assn. 5.00% 2040 | 1,857 | 2,033 | ||||||
Government National Mortgage Assn. 3.50% 2041 | 2,454 | 2,440 | ||||||
Government National Mortgage Assn. 4.00% 2041 | 1,939 | 2,009 | ||||||
Government National Mortgage Assn. 4.00% 2041 | 1,443 | 1,495 | ||||||
Government National Mortgage Assn. 4.50% 2041 | 1,026 | 1,095 | ||||||
American Tower Trust I, Series 2007-1A, Class A-FX, 5.42% 20375 | 7,250 | 7,799 | ||||||
American Tower Trust I, Series 2007-1A, Class B, 5.537% 20375 | 20,000 | 21,747 | ||||||
American Tower Trust I, Series 2007-1A, Class D, 5.957% 20375 | 29,375 | 31,742 | ||||||
American Tower Trust I, Series 2007-1A, Class E, 6.249% 20375 | 15,500 | 16,713 | ||||||
American Tower Trust I, Series 2007-1A, Class F, 6.639% 20375 | 550 | 592 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-CIBC5, Class A-1, 4.372% 2037 | 399 | 401 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2003-ML1, Class A-1, 3.972% 2039 | 508 | 513 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3, Class A-2, 4.223% 2042 | 2,304 | 2,310 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP7, Class A-4, 5.88% 20457 | 14,700 | 16,286 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2011-C4, Class A-2, 3.341% 20465 | 7,500 | 7,567 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2011-C3A, Class A-2, 3.673% 20465 | 24,000 | 24,618 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP1, Class A-2, 4.625% 2046 | 3,804 | 3,857 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2007-CB19, Class A-4, 5.741% 20497 | 15,450 | 16,683 | ||||||
CS First Boston Mortgage Securities Corp., Series 2001-CKN5, Class A-4, 5.435% 2034 | 177 | 177 | ||||||
CS First Boston Mortgage Securities Corp., Series 2004-5, Class IV-A-1, 6.00% 2034 | 2,181 | 2,201 | ||||||
CS First Boston Mortgage Securities Corp., Series 2005-C3, Class A-AB, 4.614% 2037 | 7,463 | 7,746 | ||||||
CS First Boston Mortgage Securities Corp., Series 2007-3, Class 4-A-1, 5.00% 2037 | 6,486 | 6,196 | ||||||
CS First Boston Mortgage Securities Corp., Series 2007-1, Class 1-A-2A, 5.802% 20377 | 9,080 | 5,038 | ||||||
CS First Boston Mortgage Securities Corp., Series 2007-1, Class 1-A-6A, 5.863% 20377 | 6,361 | 3,284 | ||||||
CS First Boston Mortgage Securities Corp., Series 2002-CKN2, Class A-3, 6.133% 2037 | 6,473 | 6,572 | ||||||
CS First Boston Mortgage Securities Corp., Series 2005-C5, Class A-2, 5.10% 20387 | 191 | 191 | ||||||
CS First Boston Mortgage Securities Corp., Series 2007-C4, Class A-4, 5.799% 20397 | 18,880 | 20,178 | ||||||
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-3, 5.23% 20407 | 7,587 | 7,871 | ||||||
WaMu Mortgage Pass-Through Certificates Trust, Series 2006-AR12, Class 1-A2, 5.688% 20367 | 10,000 | 7,272 | ||||||
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY7, Class 2-A1, 5.47% 20377 | 12,837 | 8,665 | ||||||
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY6, Class 2-A3, 5.578% 20377 | 34,704 | 28,076 | ||||||
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY7, Class 4-A2, 5.603% 20377 | 11,474 | 9,403 | ||||||
Countrywide Alternative Loan Trust, Series 2005-49CB, Class A-1, 5.50% 2035 | 23,670 | 23,093 | ||||||
Countrywide Alternative Loan Trust, Series 2005-54CB, Class 2-A-5, 5.50% 2035 | 11,354 | 8,939 | ||||||
Countrywide Alternative Loan Trust, Series 2004-36CB, Class 1-A-1, 6.00% 2035 | 3,037 | 2,942 | ||||||
Countrywide Alternative Loan Trust, Series 2007-HY4, Class 3-A-1, 5.395% 20477 | 8,173 | 5,023 | ||||||
Countrywide Alternative Loan Trust, Series 2007-HY4, Class 4-A-1, 5.431% 20477 | 13,140 | 9,179 | ||||||
CHL Mortgage Pass-Through Trust, Series 2007-HY5, Class 3-A-1, 5.937% 20377 | 13,997 | 11,530 | ||||||
CHL Mortgage Pass-Through Trust, Series 2007-HY4, Class 1-A-1, 5.646% 20477 | 14,952 | 10,409 | ||||||
CHL Mortgage Pass-Through Trust, Series 2007-HY5, Class 1-A-1, 5.681% 20477 | 26,313 | 19,163 | ||||||
Wachovia Bank Commercial Mortgage Trust, Series 2005-C16, Class A-PB, 4.692% 2041 | 9,969 | 10,351 | ||||||
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-4, 5.269% 20447 | 22,000 | 24,108 | ||||||
Wachovia Bank Commercial Mortgage Trust, Series 2006-C23, Class A-PB, 5.446% 2045 | 3,781 | 3,853 | ||||||
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-2, 5.117% 2037 | 6,536 | 6,645 | ||||||
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-4-1, 5.243% 20377 | 10,000 | 10,527 | ||||||
Greenwich Capital Commercial Funding Corp., Series 2006-GG7, Class A-4, 5.881% 20387 | 7,000 | 7,772 | ||||||
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class A-4, 5.444% 2039 | 10,000 | 10,754 | ||||||
GE Commercial Mortgage Corp., Series 2004-C1, Class A-2, 3.915% 2038 | 263 | 263 | ||||||
GE Commercial Mortgage Corp., Series 2006-C1, Class A-4, 5.333% 20447 | 13,000 | 14,209 | ||||||
GE Commercial Mortgage Corp., Series 2005-C4, Class A-3A, 5.314% 20457 | 17,000 | 17,462 | ||||||
ML-CFC Commercial Mortgage Trust, Series 2006-4, Class A-3, 5.172% (undated)7 | 27,410 | 29,316 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-20, Class 3-A1, 5.25% 20357 | 3,475 | 3,446 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-8, Class 3-AF, 0.567% 20367 | 4,754 | 3,140 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-9, Class 2-A2, 5.349% 20367 | 5,404 | 3,867 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-4, Class 6-A, 5.655% 20367 | 10,143 | 8,077 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-12, Class 2-A1, 5.349% 20377 | 7,796 | 5,611 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-9, Class 2-A1, 5.19% 20477 | 4,832 | 3,048 | ||||||
Banc of America Commercial Mortgage Inc., Series 2005-5, Class A-4, 5.115% 20457 | 3,000 | 3,285 | ||||||
Banc of America Commercial Mortgage Inc., Series 2005-5, Class A-3B, 5.224% 20457 | 17,730 | 18,108 | ||||||
Banc of America Commercial Mortgage Inc., Series 2007-3, Class A-4, 5.624% (undated)7 | 5,000 | 5,425 | ||||||
Bank of America 5.50% 20125 | 22,500 | 23,283 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP6, Class A-4, 5.475% 20437 | 20,250 | 22,248 | ||||||
IndyMac INDX Mortgage Loan Trust, Series 2006-AR25, Class 3-A-1, 4.082% 20367 | 24,254 | 11,477 | ||||||
IndyMac INDX Mortgage Loan Trust, Series 2006-AR5, Class 2-A-1, 5.17% 20367 | 11,660 | 9,353 | ||||||
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 20263,5 | 18,763 | 19,552 | ||||||
Nationwide Building Society, Series 2007-2, 5.50% 20125 | 17,500 | 18,262 | ||||||
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2005-CD1, Class A-4, 5.22% 20447 | 5,500 | 6,040 | ||||||
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2006-CD3, Class A-5, 5.617% 2048 | 8,000 | 8,643 | ||||||
Lehman Mortgage Trust, Series 2006-6, Class 3-A-9, 5.50% 2036 | 21,333 | 14,453 | ||||||
Morgan Stanley Capital I Trust, Series 2005-HQ7, Class A-2, 5.202% 20427 | 13,985 | 14,306 | ||||||
LB-UBS Commercial Mortgage Trust, Series 2005-C7, Class A-4, 5.197% 20307 | 11,422 | 12,479 | ||||||
Citicorp Mortgage Securities, Inc. 5.50% 2035 | 10,889 | 10,942 | ||||||
Crown Castle Towers LLC, Series 2010-1, Class C, 4.523% 20355 | 10,000 | 10,581 | ||||||
Bank of Montreal 2.85% 20155 | 10,000 | 10,465 | ||||||
Bear Stearns ARM Trust, Series 2005-6, Class I-A-1, 2.766% 20357 | 9,443 | 7,140 | ||||||
Bear Stearns ARM Trust, Series 2006-2, Class 2-A-1, 2.804% 20367 | 3,765 | 2,501 | ||||||
Morgan Stanley Mortgage Loan Trust, Series 2005-3AR, Class 3-A, 2.618% 20357 | 13,428 | 9,444 | ||||||
GSR Mortgage Loan Trust, Series 2004-2F, Class VIIA-1, 4.50% 2019 | 6,084 | 6,184 | ||||||
GSR Mortgage Loan Trust, Series 2004-15F, Class 5A-1, 5.50% 2020 | 1,865 | 1,908 | ||||||
DBUBS Mortgage Trust, Series 2011-LC1A, Class A1, 3.742% 20465 | 7,731 | 8,019 | ||||||
American General Mortgage Loan Trust, Series 2006-1, Class A-5, 5.738% 20355,7 | 7,598 | 7,971 | ||||||
Commercial Mortgage Trust, Series 2003-LNB1, Class A-2, 4.084% 2038 | 6,925 | 7,166 | ||||||
American Home Mortgage Assets Trust, Series 2007-3, Class II-2A-1, 6.25% 20377 | 12,032 | 6,721 | ||||||
Wells Fargo Mortgage-backed Securities Trust, Series 2006-AR4, Class 2-A-4, 5.617% 20367 | 6,200 | 5,771 | ||||||
Bear Stearns ALT-A Trust, Series 2006-2, Class II-4-A-1, 5.585% 20367 | 7,853 | 4,790 | ||||||
Residential Accredit Loans, Inc., Series 2005-QR1, Class A, 6.00% 2034 | 4,684 | 4,777 | ||||||
Citigroup Mortgage Loan Trust, Inc., Series 2005-8, Class I-A4A, 5.297% 20357 | 2,735 | 2,318 | ||||||
Citigroup Mortgage Loan Trust, Inc., Series 2007-AR5, Class 1-A2A, 5.264% 20377 | 3,452 | 2,262 | ||||||
Banc of America Mortgage Securities, Inc., Series 2005-E, Class 4-A1, 5.32% 20357 | 4,971 | 4,533 | ||||||
BCAP LLC Trust, Series 2006-AA2, Class A-1, 0.357% 20377 | 7,270 | 3,850 | ||||||
FDIC Structured Sale Guaranteed Notes, Series 2010-L1A, Class A-1, 0% 20115 | 750 | 750 | ||||||
FDIC Structured Sale Guaranteed Notes, Series 2010-L2A, Class A, 3.00% 20195 | 2,124 | 2,141 | ||||||
Banc of America Funding Trust, Series 2006-7, Class T-2-A-1, 5.878% 2036 | 3,658 | 2,259 | ||||||
Washington Mutual Mortgage, WMALT Series 2007-2, Class 3-A-1, 5.50% 2022 | 2,202 | 2,042 | ||||||
J.P. Morgan Mortgage Trust, Series 2006-A3, Class 3-A-3, 5.677% 20367 | 1,812 | 1,462 | ||||||
Harborview Mortgage Loan Trust, Series 2006-6, Class 1A, 2.867% 20367 | 2,184 | 1,417 | ||||||
National Credit Union Administration, Series 2011-M1, Class A2, 1.40% 20153 | 709 | 711 | ||||||
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-C1, Class X, interest only, 0.619% 20315,7 | 16,118 | 268 | ||||||
Financial Asset Securitization, Inc., Series 1997-NAM1, Class B-1, 7.75% 2027 | 212 | 217 | ||||||
3,133,173 | ||||||||
CONSUMER DISCRETIONARY — 4.16% | ||||||||
Virgin Media Finance PLC, Series 1, 9.50% 2016 | 86,065 | 97,253 | ||||||
Virgin Media Secured Finance PLC 6.50% 2018 | 8,800 | 9,724 | ||||||
Virgin Media Finance PLC 8.375% 20195 | 41,674 | 46,779 | ||||||
Virgin Media Secured Finance PLC 5.25% 20215 | 8,225 | 8,887 | ||||||
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.00% 20125 | 10,425 | 10,894 | ||||||
Charter Communications Operating, LLC, Term Loan B, 7.25% 20146,7,8 | 189 | 189 | ||||||
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 10.875% 20145 | 24,550 | 27,189 | ||||||
Charter Communications, Inc. 13.50% 2016 | 24,238 | 28,722 | ||||||
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 7.25% 2017 | 38,100 | 40,386 | ||||||
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 7.875% 2018 | 28,250 | 30,510 | ||||||
CCO Holdings LLC and CCO Holdings Capital Corp. 7.00% 2019 | 10,000 | 10,450 | ||||||
Univision Communications Inc., Term Loan, 4.437% 20176,7,8 | 95,154 | 90,320 | ||||||
Univision Communications Inc. 6.875% 20195 | 10,000 | 9,975 | ||||||
Univision Communications Inc. 8.50% 20215 | 42,120 | 41,909 | ||||||
Allison Transmission Holdings, Inc., Term Loan B, 2.94% 20146,7,8 | 107,966 | 105,695 | ||||||
Allison Transmission Holdings, Inc. 11.00% 20155 | 34,070 | 36,497 | ||||||
MGM Resorts International 6.75% 2012 | 32,010 | 32,730 | ||||||
MGM Resorts International 6.75% 2013 | 19,860 | 20,158 | ||||||
MGM Resorts International 13.00% 2013 | 10,725 | 12,843 | ||||||
MGM Resorts International 5.875% 2014 | 26,475 | 26,078 | ||||||
MGM Resorts International 10.375% 2014 | 1,675 | 1,922 | ||||||
MGM Resorts International 7.50% 2016 | 4,000 | 3,920 | ||||||
MGM Resorts International 11.125% 2017 | 2,950 | 3,415 | ||||||
MGM Resorts International 9.00% 2020 | 5,150 | 5,755 | ||||||
Toys “R” Us-Delaware, Inc., Term Loan B, 6.00% 20166,7,8 | 14,118 | 14,157 | ||||||
Toys “R” Us-Delaware, Inc. 7.375% 20165 | 3,755 | 3,886 | ||||||
Toys “R” Us Property Co. II, LLC 8.50% 2017 | 14,125 | 15,184 | ||||||
Toys “R” Us Property Co. I, LLC 10.75% 2017 | 31,775 | 35,906 | ||||||
Toys “R” Us-Delaware, Inc., Term Loan B2, 5.25% 20186,7,8 | 26,875 | 26,741 | ||||||
Toys “R” Us, Inc. 7.375% 2018 | 2,750 | 2,654 | ||||||
Boyd Gaming Corp. 6.75% 2014 | 10,504 | 10,517 | ||||||
Boyd Gaming Corp. 7.125% 2016 | 5,885 | 5,532 | ||||||
Boyd Gaming Corp. 9.125% 20185 | 77,375 | 80,180 | ||||||
DISH DBS Corp 7.875% 2019 | 1,425 | 1,573 | ||||||
DISH DBS Corp 6.75% 20215 | 82,975 | 86,087 | ||||||
Time Warner Cable Inc. 6.20% 2013 | 1,600 | 1,754 | ||||||
Time Warner Cable Inc. 7.50% 2014 | 10,400 | 12,014 | ||||||
Time Warner Cable Inc. 3.50% 2015 | 2,000 | 2,110 | ||||||
Time Warner Cable Inc. 6.75% 2018 | 22,500 | 26,835 | ||||||
Time Warner Cable Inc. 5.00% 2020 | 19,000 | 20,459 | ||||||
Time Warner Cable Inc. 4.125% 2021 | 17,800 | 17,796 | ||||||
Limited Brands, Inc. 5.25% 2014 | 1,585 | 1,676 | ||||||
Limited Brands, Inc. 8.50% 2019 | 20,500 | 23,677 | ||||||
Limited Brands, Inc. 7.00% 2020 | 22,315 | 23,821 | ||||||
Limited Brands, Inc. 6.625% 2021 | 22,440 | 23,338 | ||||||
Comcast Corp. 5.90% 2016 | 10,000 | 11,600 | ||||||
Comcast Corp. 6.30% 2017 | 3,000 | 3,557 | ||||||
Comcast Corp. 6.45% 2037 | 35,800 | 39,900 | ||||||
Comcast Corp. 6.95% 2037 | 10,275 | 12,097 | ||||||
Comcast Corp. 6.40% 2040 | 3,700 | 4,152 | ||||||
Sally Holdings LLC and Sally Capital Inc. 9.25% 2014 | 63,875 | 66,909 | ||||||
Sally Holdings LLC and Sally Capital Inc. 10.50% 2016 | 2,650 | 2,849 | ||||||
CSC Holdings, Inc., Series B, 6.75% 2012 | 400 | 412 | ||||||
CSC Holdings, Inc. 8.50% 2014 | 14,975 | 16,772 | ||||||
CSC Holdings, Inc. 8.50% 2015 | 2,000 | 2,170 | ||||||
Cablevision Systems Corp. 8.625% 2017 | 10,000 | 11,100 | ||||||
CSC Holdings, Inc. 8.625% 2019 | 14,375 | 16,567 | ||||||
Cablevision Systems Corp. 8.00% 2020 | 20,000 | 22,000 | ||||||
Cinemark USA, Inc., Term Loan, 3.44% 20166,7,8 | 3,621 | 3,642 | ||||||
Cinemark USA, Inc. 8.625% 2019 | 58,375 | 64,067 | ||||||
Michaels Stores, Inc., Term Loan B1, 2.50% 20136,7,8 | 20,139 | 19,825 | ||||||
Michaels Stores, Inc. 0%/13.00% 201610 | 16,070 | 16,833 | ||||||
Michaels Stores, Inc., Term Loan B2, 4.75% 20166,7,8 | 3,727 | 3,713 | ||||||
Michaels Stores, Inc. 7.75% 20185 | 25,500 | 25,628 | ||||||
J.C. Penney Co., Inc. 9.00% 2012 | 12,006 | 12,906 | ||||||
J.C. Penney Co., Inc., Series A, 6.875% 2015 | 4,005 | 4,416 | ||||||
J.C. Penney Co., Inc. 7.65% 2016 | 12,500 | 14,078 | ||||||
J.C. Penney Co., Inc. 5.75% 2018 | 19,293 | 19,824 | ||||||
J.C. Penney Co., Inc. 5.65% 2020 | 6,453 | 6,421 | ||||||
Neiman Marcus Group, Inc. 10.375% 2015 | 20,400 | 21,471 | ||||||
Neiman Marcus Group, Inc., Term Loan B, 4.75% 20186,7,8 | 35,820 | 35,356 | ||||||
Time Warner Inc. 5.875% 2016 | 19,985 | 23,150 | ||||||
Time Warner Companies, Inc. 7.25% 2017 | 1,500 | 1,844 | ||||||
Time Warner Inc. 4.75% 2021 | 19,000 | 20,010 | ||||||
Time Warner Inc. 6.25% 2041 | 9,000 | 9,783 | ||||||
Macy’s Retail Holdings, Inc. 8.125% 20157 | 34,040 | 40,754 | ||||||
Federated Department Stores, Inc. 6.79% 2027 | 8,995 | 10,122 | ||||||
AMC Entertainment Inc. 8.75% 2019 | 42,400 | 45,262 | ||||||
Wynn Las Vegas, LLC and Wynn Capital Corp. 7.875% 2017 | 4,000 | 4,470 | ||||||
Wynn Las Vegas, LLC and Wynn Capital Corp. 7.75% 2020 | 35,510 | 39,416 | ||||||
News America Inc. 5.30% 2014 | 20,000 | 22,100 | ||||||
News America Holdings Inc. 8.00% 2016 | 1,000 | 1,204 | ||||||
News America Inc. 4.50% 20215 | 3,750 | 3,756 | ||||||
News America Inc. 6.65% 2037 | 3,650 | 3,841 | ||||||
News America Inc. 6.15% 20415 | 12,150 | 12,163 | ||||||
Burlington Coat Factory Warehouse Corp., Term Loan B, 6.25% 20176,7,8 | 35,624 | 35,680 | ||||||
Burlington Coat Factory Warehouse Corp. 10.00% 20195 | 3,700 | 3,728 | ||||||
Home Depot, Inc. 5.40% 2016 | 4,819 | 5,509 | ||||||
Home Depot, Inc. 5.875% 2036 | 5,000 | 5,441 | ||||||
Home Depot, Inc. 5.95% 2041 | 25,000 | 27,248 | ||||||
Clear Channel Worldwide Holdings, Inc., Series B, 9.25% 2017 | 32,300 | 35,449 | ||||||
Vidéotron Ltée 6.875% 2014 | 4,347 | 4,418 | ||||||
Vidéotron Ltée 6.375% 2015 | 4,905 | 5,064 | ||||||
Quebecor Media Inc. 7.75% 2016 | 24,450 | 25,428 | ||||||
Cox Communications, Inc. 5.45% 2014 | 5,000 | 5,607 | ||||||
Cox Communications, Inc. 5.875% 20165 | 25,000 | 28,735 | ||||||
Technical Olympic USA, Inc. 9.00% 20103,9 | 10,675 | 7,013 | ||||||
Technical Olympic USA, Inc. 9.00% 20103,9 | 7,815 | 5,134 | ||||||
Technical Olympic USA, Inc. 9.25% 20113,5,9 | 33,175 | 21,796 | ||||||
Marina District Finance Co., Inc. 9.50% 2015 | 32,000 | 33,600 | ||||||
Revel Entertainment, Term Loan B, 9.00% 20186,7,8 | 34,100 | 32,432 | ||||||
Marriott International, Inc., Series J, 5.625% 2013 | 8,330 | 8,874 | ||||||
Marriott International, Inc., Series I, 6.375% 2017 | 19,500 | 22,808 | ||||||
Target Corp. 6.00% 2018 | 24,500 | 28,973 | ||||||
DaimlerChrysler North America Holding Corp., Series E, 5.75% 2011 | 14,150 | 14,222 | ||||||
DaimlerChrysler North America Holding Corp. 7.30% 2012 | 7,875 | 8,110 | ||||||
DaimlerChrysler North America Holding Corp. 6.50% 2013 | 5,400 | 6,003 | ||||||
Burger King Corp. 9.875% 2018 | 12,500 | 13,719 | ||||||
Burger King Corp 0%/11.00% 20195,10 | 23,475 | 14,144 | ||||||
CityCenter Holdings, LLC 7.625% 20165 | 19,700 | 20,685 | ||||||
CityCenter Holdings, LLC 11.50% 20175,11 | 6,334 | 6,804 | ||||||
PETCO Animal Supplies, Inc. 9.25% 20185 | 24,875 | 26,989 | ||||||
Mediacom Broadband LLC and Mediacom Broadband Corp. 8.50% 2015 | 10,055 | 10,445 | ||||||
Mediacom LLC and Mediacom Capital Corp. 9.125% 2019 | 15,000 | 16,050 | ||||||
NBC Universal, Inc. 2.10% 20145 | 3,000 | 3,064 | ||||||
NBC Universal, Inc. 2.875% 20165 | 10,000 | 10,215 | ||||||
NBC Universal, Inc. 5.15% 20205 | 3,500 | 3,814 | ||||||
NBC Universal, Inc. 4.375% 20215 | 4,750 | 4,865 | ||||||
NBC Universal, Inc. 6.40% 20405 | 1,350 | 1,495 | ||||||
NBC Universal, Inc. 5.95% 20415 | 2,650 | 2,794 | ||||||
DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. 3.50% 2016 | 24,463 | 25,772 | ||||||
Regal Cinemas Corp. 8.625% 2019 | 23,550 | 25,434 | ||||||
LBI Media, Inc. 8.50% 20175 | 32,174 | 25,297 | ||||||
Tower Automotive Holdings 10.625% 20175 | 22,924 | 24,758 | ||||||
Royal Caribbean Cruises Ltd. 11.875% 2015 | 18,175 | 22,541 | ||||||
ONO Finance II PLC 10.875% 20195 | 21,205 | 22,212 | ||||||
Volkswagen International Finance NV 1.625% 20135 | 10,000 | 10,109 | ||||||
Volkswagen International Finance NV 0.856% 20145,7 | 10,000 | 10,040 | ||||||
Warner Music Group 9.50% 20165 | 925 | 986 | ||||||
Warner Music Group 9.50% 2016 | 250 | 267 | ||||||
Warner Music Group 11.50% 20185 | 17,100 | 17,228 | ||||||
UPC Germany GmbH 8.125% 20175 | 15,800 | 17,064 | ||||||
Bon-Ton Department Stores, Inc. 10.25% 2014 | 15,550 | 15,589 | ||||||
Needle Merger Sub Corp. 8.125% 20195 | 15,220 | 15,448 | ||||||
Mohegan Tribal Gaming Authority 8.00% 2012 | 2,100 | 1,701 | ||||||
Mohegan Tribal Gaming Authority 6.125% 2013 | 4,175 | 3,517 | ||||||
Mohegan Tribal Gaming Authority 7.125% 2014 | 4,950 | 3,378 | ||||||
Mohegan Tribal Gaming Authority 6.875% 2015 | 8,775 | 5,967 | ||||||
Staples, Inc. 9.75% 2014 | 11,875 | 14,135 | ||||||
Clear Channel Communications, Inc. 5.00% 2012 | 13,705 | 13,774 | ||||||
Kabel BW Erste Beteiligu 7.50% 20195 | 12,500 | 12,938 | ||||||
Fox Acquisition LLC 13.375% 20165 | 11,690 | 12,917 | ||||||
Seminole Tribe of Florida 6.535% 20205,6 | 10,000 | 9,655 | ||||||
Seminole Tribe of Florida 7.804% 20205,6 | 3,095 | 3,084 | ||||||
Local T.V. Finance LLC 10.00% 20155,7,11 | 12,473 | 12,504 | ||||||
Tenneco Inc. 6.875% 2020 | 11,300 | 11,752 | ||||||
Thomson Reuters Corp. 5.95% 2013 | 3,625 | 3,957 | ||||||
Thomson Reuters Corp. 6.50% 2018 | 5,900 | 7,049 | ||||||
Chrysler Group, Term Loan B, 6.00% 20176,7,8 | 11,250 | 10,969 | ||||||
Dollar General Corp., Term Loan B2, 2.937% 20146,7,8 | 4,268 | 4,269 | ||||||
Dollar General Corp. 11.875% 20177,11 | 5,853 | 6,672 | ||||||
Lear Corp. 7.875% 2018 | 10,000 | 10,838 | ||||||
Gray Television, Inc. 10.50% 2015 | 10,235 | 10,670 | ||||||
Education Management LLC and Education Management Finance Corp. 8.75% 2014 | 10,390 | 10,663 | ||||||
Academy, Ltd., Term Loan B, 6.00% 20186,7,8 | 10,000 | 10,005 | ||||||
American Axle & Manufacturing Holdings, Inc. 9.25% 20175 | 8,999 | 9,978 | ||||||
Hanesbrands Inc., Series B, 3.77% 20147 | 2,005 | 2,010 | ||||||
Hanesbrands Inc. 8.00% 2016 | 2,600 | 2,870 | ||||||
Hanesbrands Inc. 6.375% 2020 | 5,000 | 5,000 | ||||||
Meritage Corp. 7.731% 20175 | 9,500 | 8,906 | ||||||
Marks and Spencer Group PLC 6.25% 20175 | 7,000 | 7,621 | ||||||
Marks and Spencer Group PLC 7.125% 20375 | 1,000 | 1,004 | ||||||
Allbritton Communications Co. 8.00% 2018 | 8,000 | 8,260 | ||||||
Seneca Gaming Corp. 8.25% 20185 | 7,925 | 8,242 | ||||||
Kohl’s Corp. 6.25% 2017 | 6,450 | 7,746 | ||||||
Libbey Glass Inc. 10.00% 2015 | 6,749 | 7,356 | ||||||
Jarden Corp. 8.00% 2016 | 5,725 | 6,240 | ||||||
Lowe’s Companies, Inc. 3.75% 2021 | 3,000 | 3,054 | ||||||
Lowe’s Companies, Inc. 5.80% 2040 | 2,700 | 2,987 | ||||||
Wendy’s/Arby’s Restaurants, LLC 10.00% 2016 | 5,400 | 6,021 | ||||||
Cequel Communications Holdings I, LLC and Cequel Capital Corp. 8.625% 20175 | 5,250 | 5,611 | ||||||
Radio One, Inc., Term Loan B, 7.50% 20166,7,8 | 5,172 | 5,196 | ||||||
Cumulus Media Inc., Term Loan, 4.50% 20196,7,8 | 3,750 | 3,772 | ||||||
Dynacast International Ltd. 9.25% 20195 | 2,825 | 2,906 | ||||||
Jaguar Land Rover PLC 8.125% 20215 | 2,800 | 2,849 | ||||||
Walt Disney Co. 5.625% 2016 | 2,000 | 2,367 | ||||||
Ford Motor Co. 9.50% 2011 | 1,000 | 1,010 | ||||||
2,864,757 | ||||||||
BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 3.64% | ||||||||
U.S. Treasury 1.125% 2011 | 32,585 | 32,699 | ||||||
U.S. Treasury 4.50% 2011 | 16,165 | 16,397 | ||||||
U.S. Treasury 4.625% 2011 | 167,750 | 170,833 | ||||||
U.S. Treasury 0.625% 2012 | 39,075 | 39,200 | ||||||
U.S. Treasury 0.625% 2012 | 17,150 | 17,227 | ||||||
U.S. Treasury 0.75% 2013 | 1,500 | 1,512 | ||||||
U.S. Treasury 1.125% 2013 | 90,000 | 91,291 | ||||||
U.S. Treasury 1.375% 2013 | 245,375 | 249,900 | ||||||
U.S. Treasury 1.50% 2013 | 40,000 | 41,044 | ||||||
U.S. Treasury 1.875% 201312 | 30,753 | 32,801 | ||||||
U.S. Treasury 2.75% 2013 | 109,500 | 115,300 | ||||||
U.S. Treasury 3.50% 2013 | 92,125 | 97,437 | ||||||
U.S. Treasury 1.875% 2014 | 10,555 | 10,952 | ||||||
U.S. Treasury 1.375% 2015 | 25,250 | 25,562 | ||||||
U.S. Treasury 1.875% 201512 | 44,139 | 49,447 | ||||||
U.S. Treasury 1.50% 2016 | 152,000 | 153,175 | ||||||
U.S. Treasury 1.50% 2016 | 30,500 | 30,688 | ||||||
U.S. Treasury 2.125% 2016 | 50,000 | 52,101 | ||||||
U.S. Treasury 3.25% 2016 | 18,395 | 20,104 | ||||||
U.S. Treasury 4.50% 2016 | 39,675 | 45,594 | ||||||
U.S. Treasury 7.50% 2016 | 20,000 | 26,212 | ||||||
U.S. Treasury 2.50% 2017 | 25,800 | 26,939 | ||||||
U.S. Treasury 2.375% 2018 | 5,500 | 5,614 | ||||||
U.S. Treasury 3.50% 2018 | 22,650 | 24,876 | ||||||
U.S. Treasury 8.75% 2020 | 20,050 | 30,097 | ||||||
U.S. Treasury 0.625% 202112 | 17,542 | 18,008 | ||||||
U.S. Treasury 6.25% 2023 | 135,000 | 176,926 | ||||||
U.S. Treasury 6.00% 2026 | 20,000 | 25,814 | ||||||
U.S. Treasury 6.75% 2026 | 12,572 | 17,394 | ||||||
U.S. Treasury 4.50% 2036 | 164,185 | 176,745 | ||||||
U.S. Treasury 4.25% 2039 | 9,025 | 9,238 | ||||||
U.S. Treasury 4.375% 2039 | 14,000 | 14,613 | ||||||
U.S. Treasury 3.875% 2040 | 18,500 | 17,687 | ||||||
U.S. Treasury 4.25% 2040 | 2,600 | 2,651 | ||||||
U.S. Treasury 4.375% 2040 | 16,700 | 17,409 | ||||||
U.S. Treasury 4.625% 2040 | 231,945 | 252,159 | ||||||
U.S. Treasury 4.75% 2041 | 152,800 | 169,290 | ||||||
Fannie Mae 1.00% 2013 | 6,850 | 6,915 | ||||||
Fannie Mae 6.25% 2029 | 32,000 | 40,143 | ||||||
Freddie Mac 1.125% 2012 | 35,125 | 35,426 | ||||||
Freddie Mac 1.75% 2015 | 3,500 | 3,561 | ||||||
CoBank ACB 7.875% 20185 | 10,000 | 11,669 | ||||||
CoBank ACB 0.847% 20225,7 | 8,315 | 7,460 | ||||||
Federal Home Loan Bank 0.096% 20117 | 14,200 | 14,202 | ||||||
United States Government Agency-Guaranteed (FDIC insured), Regions Bank 3.25% 2011 | 13,375 | 13,519 | ||||||
United States Government Agency-Guaranteed (FDIC insured), PNC Funding Corp. 2.30% 2012 | 12,500 | 12,712 | ||||||
United States Government Agency-Guaranteed (FDIC insured), Sovereign Bancorp, Inc. 2.75% 2012 | 12,500 | 12,642 | ||||||
United States Government Agency-Guaranteed (FDIC insured), Bank of America Corp., Series L, 3.125% 2012 | 12,000 | 12,287 | ||||||
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 2.20% 2012 | 11,750 | 11,933 | ||||||
United States Agency for International Development, Republic of Egypt 4.45% 2015 | 10,000 | 11,101 | ||||||
Federal Farm Credit Banks, Consolidated Systemwide Designated Bonds, 1.625% 2014 | 6,975 | 7,139 | ||||||
Tennessee Valley Authority, Series A, 3.875% 2021 | 850 | 897 | ||||||
2,506,542 | ||||||||
TELECOMMUNICATION SERVICES — 2.04% | ||||||||
Sprint Capital Corp. 8.375% 2012 | 10,775 | 11,233 | ||||||
Nextel Communications, Inc., Series E, 6.875% 2013 | 76,000 | 76,713 | ||||||
Nextel Communications, Inc., Series F, 5.95% 2014 | 46,560 | 46,938 | ||||||
Nextel Communications, Inc., Series D, 7.375% 2015 | 186,970 | 187,905 | ||||||
Clearwire Communications and Clearwire Finance, Inc., Series B, 12.00% 20155 | 54,780 | 56,218 | ||||||
Clearwire Communications and Clearwire Finance, Inc., Series A, 12.00% 20155 | 46,210 | 47,423 | ||||||
Clearwire Communications and Clearwire Finance, Inc. 12.00% 20175 | 38,045 | 38,093 | ||||||
Wind Acquisition SA 11.75% 20175 | 90,685 | 101,000 | ||||||
Wind Acquisition SA 7.25% 20185 | 34,055 | 34,055 | ||||||
Verizon Communications Inc. 5.55% 2014 | 37,250 | 41,157 | ||||||
Verizon Communications Inc. 4.90% 2015 | 3,560 | 4,009 | ||||||
Verizon Communications Inc. 3.00% 2016 | 17,000 | 17,743 | ||||||
Verizon Communications Inc. 5.50% 2017 | 3,000 | 3,470 | ||||||
Verizon Communications Inc. 8.75% 2018 | 17,000 | 22,824 | ||||||
Verizon Communications Inc. 6.00% 2041 | 36,200 | 39,895 | ||||||
Vodafone Group PLC, Term Loan, 6.875% 20153,6,8,11 | 64,579 | 66,839 | ||||||
Vodafone Group PLC, Term Loan B, 6.25% 20163,6,8,11 | 27,525 | 27,800 | ||||||
LightSquared, Term Loan B, 12.00% 20146,8,11 | 92,574 | 84,975 | ||||||
Crown Castle International Corp. 9.00% 2015 | 33,850 | 37,235 | ||||||
Crown Castle International Corp. 7.75% 20175 | 9,950 | 10,933 | ||||||
Crown Castle International Corp. 7.125% 2019 | 19,000 | 20,354 | ||||||
Frontier Communications Corp. 7.875% 2015 | 18,475 | 20,184 | ||||||
Frontier Communications Corp. 8.25% 2017 | 23,675 | 26,102 | ||||||
Frontier Communications Corp. 8.50% 2020 | 6,950 | 7,662 | ||||||
Frontier Communications Corp. 8.75% 2022 | 4,400 | 4,851 | ||||||
AT&T Wireless Services, Inc. 8.125% 2012 | 11,935 | 12,589 | ||||||
AT&T Inc. 4.95% 2013 | 28,750 | 30,441 | ||||||
SBC Communications Inc. 5.10% 2014 | 3,500 | 3,879 | ||||||
SBC Communications Inc. 5.625% 2016 | 10,000 | 11,541 | ||||||
Cricket Communications, Inc. 10.00% 2015 | �� | 5,895 | 6,396 | |||||
Cricket Communications, Inc. 7.75% 2016 | 48,490 | 51,945 | ||||||
American Tower Corp. 4.625% 2015 | 10,000 | 10,752 | ||||||
American Tower Corp. 7.00% 2017 | 12,431 | 14,675 | ||||||
American Tower Corp. 7.25% 2019 | 24,050 | 28,650 | ||||||
Level 3 Financing, Inc. 9.25% 2014 | 2,582 | 2,668 | ||||||
Level 3 Escrow Inc. 8.125% 20195 | 36,975 | 37,345 | ||||||
Telecom Italia Capital SA, Series B, 5.25% 2013 | 4,000 | 4,070 | ||||||
Telecom Italia Capital SA 5.25% 2015 | 14,000 | 14,018 | ||||||
Telecom Italia Capital SA 6.999% 2018 | 16,500 | 17,413 | ||||||
Telecom Italia Capital SA 7.175% 2019 | 2,000 | 2,120 | ||||||
Telecom Italia Capital SA 6.00% 2034 | 1,815 | 1,573 | ||||||
Trilogy International Partners, LLC, 10.25% 20165 | 22,150 | 22,482 | ||||||
tw telecom holdings inc. 8.00% 2018 | 20,000 | 21,550 | ||||||
Telefónica Emisiones, SAU 3.729% 2015 | 3,050 | 3,067 | ||||||
Telefónica Emisiones, SAU 3.992% 2016 | 10,000 | 10,053 | ||||||
Telefónica Emisiones, SAU 5.134% 2020 | 7,950 | 7,870 | ||||||
SBA Telecommunications, Inc. 8.00% 2016 | 16,675 | 17,905 | ||||||
Deutsche Telekom International Finance BV 4.875% 2014 | 10,000 | 10,944 | ||||||
Sorenson Communications 10.50% 20155 | 15,525 | 10,712 | ||||||
Syniverse Holdings, Inc. 9.125% 20195 | 7,800 | 8,200 | ||||||
Qwest Capital Funding, Inc. 7.625% 2021 | 3,900 | 4,393 | ||||||
Intelsat Jackson Holding Co. 8.50% 2019 | 3,500 | 3,754 | ||||||
1,406,616 | ||||||||
INDUSTRIALS — 1.95% | ||||||||
Continental Airlines, Inc. 8.75% 2011 | 19,725 | 20,046 | ||||||
United Air Lines, Inc., Term Loan B, 2.188% 20146,7,8 | 21,738 | 20,842 | ||||||
Continental Airlines, Inc., Series 1997-1, Class A, 7.461% 20166 | 4,970 | 5,054 | ||||||
Continental Airlines, Inc., Series 2001-1, Class B, 7.373% 20176 | 2,194 | 2,210 | ||||||
Continental Airlines, Inc., Series 1998-1, Class B, 6.748% 20186 | 642 | 629 | ||||||
Continental Airlines, Inc., Series 1997-4B, Class B, 6.90% 20186 | 283 | 285 | ||||||
Continental Airlines, Inc., Series 1998-1, Class A, 6.648% 20196 | 13,956 | 14,828 | ||||||
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 20196 | 2,752 | 2,927 | ||||||
United Air Lines, Inc., Series 1996-A2, 7.87% 20193,6,9 | 2,421 | — | ||||||
Continental Airlines, Inc., Series 2000-2, Class B, 8.307% 20196 | 407 | 411 | ||||||
Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 20206 | 14,312 | 15,135 | ||||||
Continental Airlines, Inc., Series 1999-1, Class B, 6.795% 20206 | 506 | 498 | ||||||
Continental Airlines, Inc., Series 2003-ERJ3, Class A, 7.875% 20206 | 9,317 | 9,293 | ||||||
Continental Airlines, Inc., Series 1999-2, Class A-1, 7.256% 20216 | 657 | 705 | ||||||
United Air Lines, Inc., Series 2007-1, Class B, 7.336% 20215,6 | 4,758 | 4,568 | ||||||
Continental Airlines, Inc., Series 1999-2, Class B, 7.566% 20216 | 2,129 | 2,132 | ||||||
Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 20226 | 3,612 | 3,820 | ||||||
Continental Airlines, Inc., Series 2007-1, Class B, 6.903% 20226 | 11,073 | 11,018 | ||||||
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.707% 20226 | 2,870 | 3,101 | ||||||
Continental Airlines, Inc., Series 2000-1, Class A-1, 8.048% 20226 | 5,327 | 5,800 | ||||||
Continental Airlines, Inc., Series 2000-1, Class B, 8.388% 20226 | 4,440 | 4,551 | ||||||
United Air Lines, Inc., Series 2007-1, Class A, 6.636% 20246 | 10,494 | 10,567 | ||||||
Hawker Beechcraft Acquisition Co., LLC, Letter of Credit, 2.146% 20146,7,8 | 6,939 | 5,714 | ||||||
Hawker Beechcraft Acquisition Co., LLC, Term Loan B, 2.187% 20146,7,8 | 113,114 | 93,150 | ||||||
Hawker Beechcraft Acquisition Co., LLC, Term Loan B, 10.50% 20146,7,8 | 22,418 | 22,346 | ||||||
Hawker Beechcraft Acquisition Co., LLC 8.50% 2015 | 3,570 | 2,695 | ||||||
Hawker Beechcraft Acquisition Co., LLC 8.875% 20157,11 | 14,057 | 10,613 | ||||||
Hawker Beechcraft Acquisition Co., LLC 9.75% 2017 | 1,305 | 848 | ||||||
Northwest Airlines, Inc., Term Loan B, 3.75% 20136,7,8 | 3,631 | 3,531 | ||||||
Delta Air Lines, Inc., Series 2002-1, Class G-2, MBIA insured, 6.417% 20146 | 43,595 | 44,739 | ||||||
Delta Air Lines, Inc., Series 2010-B, Class 2-B, 6.75% 20155,6 | 12,500 | 12,000 | ||||||
Northwest Airlines, Inc., Term Loan A, 2.00% 20186,7,8 | 49,636 | 45,541 | ||||||
Delta Air Lines, Inc., Series 2002-1, Class G-1, MBIA insured, 6.718% 20246 | 22,480 | 22,761 | ||||||
US Investigations Services, Inc., Term Loan B, 2.997% 20156,7,8 | 14,627 | 14,335 | ||||||
US Investigations Services, Inc., Term Loan B, 7.75% 20156,7,8 | 20,663 | 20,749 | ||||||
US Investigations Services, Inc. 10.50% 20155 | 49,850 | 51,595 | ||||||
US Investigations Services, Inc. 11.75% 20165 | 19,814 | 20,706 | ||||||
Ply Gem Industries, Inc. 13.125% 2014 | 6,262 | 6,466 | ||||||
Ply Gem Industries, Inc. 8.25% 20185 | 71,500 | 68,640 | ||||||
CEVA Group PLC, Bridge Loan, 9.75% 20153,6,7,8 | 32,191 | 28,167 | ||||||
CEVA Group PLC 11.625% 20165 | 2,450 | 2,683 | ||||||
CEVA Group PLC 8.375% 20175 | 9,050 | 9,197 | ||||||
CEVA Group PLC 11.50% 20185 | 24,505 | 25,914 | ||||||
Associated Materials, LLC and AMH New Finance, Inc. 9.125% 2017 | 63,695 | 64,650 | ||||||
Nielsen Finance LLC and Nielsen Finance Co. 11.625% 2014 | 25,868 | 30,201 | ||||||
Nielsen Finance LLC and Nielsen Finance Co. 11.50% 2016 | 17,046 | 19,901 | ||||||
Nielsen Finance LLC, Term Loan 1L, 8.50% 20173,6,8 | 12,000 | 13,080 | ||||||
Nielsen Finance LLC and Nielsen Finance Co. 7.75% 20185 | 1,000 | 1,065 | ||||||
General Electric Capital Corp. 0.876% 20147 | 35,000 | 34,818 | ||||||
General Electric Capital Corp., Series A, 2.25% 2015 | 12,000 | 12,067 | ||||||
General Electric Co. 5.25% 2017 | 11,250 | 12,692 | ||||||
Ashtead Capital, Inc. 9.00% 20165 | 46,185 | 48,263 | ||||||
ARAMARK Corp. 3.773% 20157 | 12,786 | 12,626 | ||||||
ARAMARK Corp. 8.50% 2015 | 28,450 | 29,730 | ||||||
ARAMARK Corp. 8.625% 20165,11 | 2,000 | 2,070 | ||||||
AMR Corp. 9.00% 2012 | 11,000 | 11,316 | ||||||
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 20136 | 17,138 | 17,277 | ||||||
AMR Corp. 9.00% 2016 | 2,000 | 1,960 | ||||||
American Airlines, Inc., Series 2001-1, Class B, 7.377% 20196 | 6,042 | 5,045 | ||||||
AMR Corp. 10.00% 2021 | 3,000 | 2,662 | ||||||
American Airlines, Inc., Series 2001-1, Class A-1, 6.977% 20226 | 5,610 | 4,691 | ||||||
TransDigm Inc. 7.75% 20185 | 36,395 | 38,943 | ||||||
Nortek Inc. 10.00% 20185 | 22,255 | 22,756 | ||||||
Nortek Inc. 8.50% 20215 | 15,135 | 14,189 | ||||||
Esterline Technologies Corp. 6.625% 2017 | 13,025 | 13,627 | ||||||
Esterline Technologies Corp. 7.00% 2020 | 16,545 | 17,620 | ||||||
Union Pacific Corp. 5.125% 2014 | 15,325 | 16,865 | ||||||
Union Pacific Corp. 5.75% 2017 | 2,065 | 2,424 | ||||||
Union Pacific Corp. 5.70% 2018 | 8,000 | 9,315 | ||||||
RailAmerica, Inc. 9.25% 2017 | 23,149 | 25,580 | ||||||
Burlington Northern Santa Fe LLC 7.00% 2014 | 13,885 | 15,849 | ||||||
Burlington Northern Santa Fe LLC 4.10% 2021 | 7,000 | 7,189 | ||||||
Kansas City Southern Railway Co. 13.00% 2013 | 5,599 | 6,530 | ||||||
Kansas City Southern Railway Co. 8.00% 2015 | 1,500 | 1,620 | ||||||
Kansas City Southern de México, SA de CV 8.00% 2018 | 10,000 | 11,127 | ||||||
Iron Mountain Inc. 8.375% 2021 | 15,000 | 16,125 | ||||||
Honeywell International Inc. 3.875% 2014 | 13,605 | 14,687 | ||||||
Euramax International, Inc. 9.50% 20165 | 13,825 | 12,926 | ||||||
Florida East Coast Railway 8.125% 20175 | 12,075 | 12,739 | ||||||
Sequa Corp., Term Loan B, 3.50% 20146,7,8 | 11,596 | 11,429 | ||||||
USG Corp. 9.75% 20187 | 10,500 | 10,159 | ||||||
Norfolk Southern Corp. 5.75% 2016 | 6,710 | 7,740 | ||||||
Norfolk Southern Corp. 5.75% 2018 | 2,000 | 2,313 | ||||||
CSX Corp. 5.75% 2013 | 4,960 | 5,334 | ||||||
CSX Corp. 6.25% 2015 | 3,460 | 4,012 | ||||||
Atlas Copco AB 5.60% 20175 | 7,405 | 8,422 | ||||||
H&E Equipment Services, Inc. 8.375% 2016 | 7,800 | 8,092 | ||||||
Allied Waste North America, Inc. 6.875% 2017 | 7,250 | 7,849 | ||||||
Volvo Treasury AB 5.95% 20155 | 5,835 | 6,536 | ||||||
Odebrecht Finance Ltd 7.00% 2020 | 2,750 | 3,039 | ||||||
Odebrecht Finance Ltd 6.00% 20235 | 3,100 | 3,162 | ||||||
RBS Global, Inc. and Rexnord LLC 11.75% 2016 | 550 | 584 | ||||||
RBS Global, Inc. and Rexnord LLC 8.50% 2018 | 4,900 | 5,316 | ||||||
ERAC USA Finance Co. 5.25% 20205 | 5,000 | 5,444 | ||||||
Lockheed Martin Corp. 4.121% 2013 | 5,000 | 5,275 | ||||||
Navios Maritime Acquisition Corporation and Navios Acquisition Finance (US) Inc. 8.625% 2017 | 1,965 | 1,911 | ||||||
Navios Maritime Holdings Inc. 8.125% 20195 | 2,775 | 2,588 | ||||||
John Deere Capital Corp. 5.40% 2011 | 2,000 | 2,021 | ||||||
John Deere Capital Corp., Series D, 5.75% 2018 | 1,000 | 1,178 | ||||||
Koninklijke Philips Electronics NV 5.75% 2018 | 2,720 | 3,120 | ||||||
RSC Equipment Rental, Inc. and RSC Holdings III, LLC 9.50% 2014 | 1,115 | 1,161 | ||||||
RSC Equipment Rental, Inc. and RSC Holdings III, LLC 8.25% 2021 | 1,700 | 1,764 | ||||||
Caterpillar Financial Services Corp., Series F, 5.50% 2016 | 2,000 | 2,320 | ||||||
1,345,804 | ||||||||
INFORMATION TECHNOLOGY — 1.92% | ||||||||
First Data Corp., Term Loan B2, 2.937% 20146,7,8 | 100,352 | 93,578 | ||||||
First Data Corp. 9.875% 2015 | 22,241 | 22,575 | ||||||
First Data Corp. 9.875% 2015 | 320 | 326 | ||||||
First Data Corp. 10.55% 201511 | 12,961 | 13,077 | ||||||
First Data Corp. 11.25% 2016 | 179,000 | 177,210 | ||||||
First Data Corp. 7.375% 20195 | 25,075 | 25,388 | ||||||
First Data Corp. 8.875% 20205 | 7,300 | 7,848 | ||||||
First Data Corp. 8.25% 20215 | 69,847 | 68,799 | ||||||
First Data Corp. 12.625% 20215 | 90,936 | 96,847 | ||||||
First Data Corp. 8.75% 20225,7,11 | 111,971 | 110,291 | ||||||
Freescale Semiconductor, Inc., Term Loan, 4.436% 20166,7,8 | 21,718 | 21,625 | ||||||
Freescale Semiconductor, Inc. 10.125% 2016 | 45,275 | 48,784 | ||||||
Freescale Semiconductor, Inc. 9.25% 20185 | 18,000 | 19,710 | ||||||
Freescale Semiconductor, Inc. 10.125% 20185 | 30,370 | 34,014 | ||||||
SRA International, Inc., Term Loan B, 6.50% 20186,7,8 | 69,645 | 67,530 | ||||||
Sterling Merger Inc. 11.00% 20195 | 45,785 | 47,960 | ||||||
NXP BV and NXP Funding LLC 2.999% 20137 | 10,298 | 10,330 | ||||||
NXP BV and NXP Funding LLC 10.00% 20134 | 37,639 | 42,908 | ||||||
NXP BV and NXP Funding LLC 9.50% 2015 | 16,705 | 17,666 | ||||||
NXP BV and NXP Funding LLC 9.75% 20185 | 37,395 | 42,163 | ||||||
Cisco Systems, Inc. 0.499% 20147 | 10,000 | 10,040 | ||||||
Cisco Systems, Inc. 2.90% 2014 | 10,000 | 10,596 | ||||||
Cisco Systems, Inc. 3.15% 2017 | 10,000 | 10,438 | ||||||
Cisco Systems, Inc. 4.95% 2019 | 20,000 | 22,386 | ||||||
SunGard Data Systems Inc. 7.375% 2018 | 28,000 | 28,560 | ||||||
SunGard Data Systems Inc. 7.625% 2020 | 23,165 | 23,686 | ||||||
International Business Machines Corp. 1.95% 2016 | 10,000 | 10,036 | ||||||
International Business Machines Corp. 2.00% 2016 | 35,000 | 35,531 | ||||||
Jabil Circuit, Inc. 8.25% 2018 | 29,225 | 33,682 | ||||||
Jabil Circuit, Inc. 5.625% 2020 | 11,150 | 11,039 | ||||||
Sanmina-SCI Corp. 2.997% 20145,7 | 23,750 | 23,691 | ||||||
Sanmina-SCI Corp. 8.125% 2016 | 16,026 | 16,807 | ||||||
EH Holding Corp. 6.50% 20195 | 29,550 | 30,547 | ||||||
EH Holding Corp. 7.625% 20215 | 5,325 | 5,511 | ||||||
Ceridian Corp. 11.25% 2015 | 28,425 | 28,994 | ||||||
Advanced Micro Devices, Inc. 8.125% 2017 | 13,750 | 14,678 | ||||||
Advanced Micro Devices, Inc. 7.75% 2020 | 6,250 | 6,609 | ||||||
National Semiconductor Corp. 6.15% 2012 | 15,000 | 15,668 | ||||||
Serena Software, Inc. 10.375% 2016 | 13,430 | 14,118 | ||||||
1,321,246 | ||||||||
HEALTH CARE — 1.57% | ||||||||
Elan Finance PLC and Elan Finance Corp. 8.875% 2013 | 44,520 | 46,412 | ||||||
Elan Finance PLC and Elan Finance Corp. 8.75% 2016 | 63,540 | 67,988 | ||||||
Elan Finance PLC and Elan Finance Corp. 8.75% 20163 | 23,615 | 25,268 | ||||||
VWR Funding, Inc., Series B, 10.25% 20157,11 | 79,476 | 84,045 | ||||||
PTS Acquisition Corp. 9.50% 20157,11 | 73,796 | 75,641 | ||||||
Tenet Healthcare Corp. 7.375% 2013 | 32,447 | 33,583 | ||||||
Tenet Healthcare Corp. 9.25% 2015 | 22,805 | 25,028 | ||||||
Quintiles, Term Loan B, 5.00% 20186,7,8 | 58,065 | 57,920 | ||||||
Pfizer Inc 4.45% 2012 | 13,000 | 13,327 | ||||||
Pfizer Inc 5.35% 2015 | 20,000 | 22,804 | ||||||
Pfizer Inc 6.20% 2019 | 5,000 | 6,071 | ||||||
Pfizer Inc 7.20% 2039 | 10,500 | 13,992 | ||||||
Boston Scientific Corp. 6.40% 2016 | 21,735 | 25,332 | ||||||
Boston Scientific Corp. 6.00% 2020 | 23,580 | 26,918 | ||||||
Novartis Capital Corp. 4.125% 2014 | 17,250 | 18,685 | ||||||
Novartis Capital Corp. 2.90% 2015 | 14,000 | 14,847 | ||||||
Novartis Securities Investment Ltd. 5.125% 2019 | 15,000 | 17,210 | ||||||
Roche Holdings Inc. 6.00% 20195 | 20,750 | 24,752 | ||||||
Roche Holdings Inc. 7.00% 20395 | 12,000 | 15,482 | ||||||
HCA Inc., Term Loan B1, 2.496% 20136,7,8 | 8,608 | 8,541 | ||||||
HCA Inc. 6.375% 2015 | 2,400 | 2,460 | ||||||
HCA Inc. 9.25% 2016 | 5,480 | 5,874 | ||||||
HCA Inc. 9.625% 20167,11 | 3,000 | 3,217 | ||||||
HCA Inc., Term Loan B2, 3.496% 20176,7,8 | 6,292 | 6,151 | ||||||
HCA Inc. 7.50% 2022 | 11,615 | 11,818 | ||||||
Symbion Inc 8.00% 20165 | 36,855 | 36,026 | ||||||
Grifols Inc 8.25% 20185 | 29,125 | 30,800 | ||||||
Alkermes, Inc., Term Loan B, 6.75% 20176,7,8 | 18,585 | 18,666 | ||||||
Alkermes, Inc., Term Loan B, 9.50% 20186,7,8 | 9,535 | 9,678 | ||||||
Abbott Laboratories 2.70% 2015 | 10,000 | 10,542 | ||||||
Abbott Laboratories 5.125% 2019 | 14,000 | 15,881 | ||||||
HealthSouth Corp. 10.75% 2016 | 24,402 | 25,866 | ||||||
inVentiv Health Inc. 10.00% 20185 | 24,055 | 23,574 | ||||||
Merge Healthcare Inc 11.75% 2015 | 18,410 | 19,883 | ||||||
Merge Healthcare Inc. 11.75% 20155 | 3,205 | 3,461 | ||||||
Express Scripts Inc. 3.125% 2016 | 11,894 | 12,166 | ||||||
Express Scripts Inc. 7.25% 2019 | 8,985 | 10,866 | ||||||
Patheon Inc. 8.625% 20175 | 22,596 | 22,793 | ||||||
Sanofi-aventis SA 0.446% 20137 | 10,000 | 10,034 | ||||||
Sanofi-aventis SA 0.556% 20147 | 7,500 | 7,542 | ||||||
Centene Corp. 5.75% 2017 | 17,215 | 17,172 | ||||||
Surgical Care Affiliates, Inc. 8.875% 20155,7,11 | 6,591 | 6,839 | ||||||
Surgical Care Affiliates, Inc. 10.00% 20175 | 9,500 | 9,785 | ||||||
UnitedHealth Group Inc. 6.00% 2017 | 12,430 | 14,522 | ||||||
GlaxoSmithKline Capital Inc. 4.85% 2013 | 13,500 | 14,521 | ||||||
Multiplan Inc. 9.875% 20185 | 12,680 | 13,663 | ||||||
Endo Pharmaceuticals Holdings Inc. 7.00% 20195 | 2,450 | 2,579 | ||||||
Endo Pharmaceuticals Holdings Inc. 7.00% 20205 | 8,850 | 9,270 | ||||||
Cardinal Health, Inc. 5.80% 2016 | 10,000 | 11,513 | ||||||
WellPoint, Inc. 6.00% 2014 | 10,000 | 11,161 | ||||||
McKesson Corp. 3.25% 2016 | 6,525 | 6,891 | ||||||
McKesson Corp. 4.75% 2021 | 3,475 | 3,785 | ||||||
Bausch & Lomb Inc. 9.875% 2015 | 9,175 | 9,748 | ||||||
Coventry Health Care, Inc. 6.30% 2014 | 8,370 | 9,248 | ||||||
Rotech Healthcare Inc. 10.50% 2018 | 7,195 | 7,105 | ||||||
Medco Health Solutions, Inc. 2.75% 2015 | 6,305 | 6,460 | ||||||
Biogen Idec Inc. 6.00% 2013 | 6,000 | 6,412 | ||||||
Accellent Inc. 8.375% 2017 | 5,900 | 6,151 | ||||||
Vanguard Health Systems Inc. 0% 2016 | 3,877 | 2,598 | ||||||
ConvaTec Healthcare 10.50% 20185 | 1,455 | 1,506 | ||||||
1,082,073 | ||||||||
ENERGY — 1.29% | ||||||||
Petroplus Finance Ltd. 6.75% 20145 | 23,865 | 23,328 | ||||||
Petroplus Finance Ltd. 7.00% 20175 | 52,675 | 49,251 | ||||||
Petroplus Finance Ltd. 9.375% 20195 | 32,920 | 33,332 | ||||||
Ras Laffan Liquefied Natural Gas III 5.50% 20145 | 2,400 | 2,655 | ||||||
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20145,6 | 7,493 | 8,243 | ||||||
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20146 | 1,680 | 1,848 | ||||||
Ras Laffan Liquefied Natural Gas III 6.75% 2019 | 4,000 | 4,715 | ||||||
Ras Laffan Liquefied Natural Gas III 6.75% 20195 | 1,000 | 1,179 | ||||||
Ras Laffan Liquefied Natural Gas II 5.298% 20205,6 | 32,121 | 34,691 | ||||||
Ras Laffan Liquefied Natural Gas III 5.838% 20275,6 | 45,650 | 47,704 | ||||||
TransCanada PipeLines Ltd. 7.125% 2019 | 12,130 | 15,210 | ||||||
TransCanada PipeLines Ltd. 7.625% 2039 | 10,750 | 14,112 | ||||||
TransCanada PipeLines Ltd., junior subordinated 6.35% 20677 | 61,150 | 62,711 | ||||||
Anadarko Petroleum Corp. 5.95% 2016 | 10,500 | 12,119 | ||||||
Anadarko Petroleum Corp. 6.375% 2017 | 5,500 | 6,492 | ||||||
Anadarko Petroleum Corp. 8.70% 2019 | 31,625 | 41,523 | ||||||
Anadarko Petroleum Corp. 6.20% 2040 | 4,000 | 4,273 | ||||||
Kinder Morgan Energy Partners LP 5.85% 2012 | 2,400 | 2,523 | ||||||
Kinder Morgan Energy Partners LP 5.125% 2014 | 10,325 | 11,409 | ||||||
Kinder Morgan Energy Partners LP 3.50% 2016 | 33,950 | 35,615 | ||||||
Kinder Morgan Energy Partners LP 6.00% 2017 | 2,950 | 3,401 | ||||||
Kinder Morgan Energy Partners LP 9.00% 2019 | 1,660 | 2,174 | ||||||
Kinder Morgan Energy Partners LP 5.30% 2020 | 2,750 | 2,999 | ||||||
Kinder Morgan Energy Partners LP 6.375% 2041 | 2,500 | 2,709 | ||||||
Shell International Finance BV 1.875% 2013 | 10,000 | 10,235 | ||||||
Shell International Finance BV 4.00% 2014 | 24,500 | 26,489 | ||||||
Shell International Finance BV 4.30% 2019 | 9,000 | 9,772 | ||||||
Shell International Finance BV 6.375% 2038 | 5,500 | 6,839 | ||||||
Enbridge Energy Partners, LP, Series B, 6.50% 2018 | 5,225 | 6,195 | ||||||
Enbridge Energy Partners, LP 9.875% 2019 | 12,000 | 16,214 | ||||||
Enbridge Energy Partners, LP, Series B, 7.50% 2038 | 6,000 | 7,548 | ||||||
Enbridge Energy Partners, LP, junior subordinated 8.05% 20777 | 10,500 | 11,568 | ||||||
Transcontinental Gas Pipe Line Corp., Series B, 7.00% 2011 | 10,000 | 10,022 | ||||||
Williams Partners L.P. and Williams Partners Finance Corp. 7.25% 2017 | 7,200 | 8,702 | ||||||
Williams Partners L.P. 4.125% 2020 | 6,500 | 6,508 | ||||||
Williams Partners L.P. and Williams Partners Finance Corp. 5.25% 2020 | 5,460 | 5,979 | ||||||
Williams Partners L.P. and Williams Partners Finance Corp. 6.30% 2040 | 1,750 | 1,918 | ||||||
QGOG Atlantic/Alaskan Rigs Ltd. 5.25% 20185,6 | 29,750 | 30,419 | ||||||
Enterprise Products Operating LLC 5.65% 2013 | 10,000 | 10,708 | ||||||
Enterprise Products Operating LLC 5.20% 2020 | 11,250 | 12,324 | ||||||
Enterprise Products Operating LLC 7.00% 20677 | 4,830 | 4,871 | ||||||
Gazprom OJSC 5.092% 20155 | 6,255 | 6,646 | ||||||
Gazprom OJSC 6.51% 20225 | 4,700 | 5,147 | ||||||
Gazprom OJSC 7.288% 2037 | 6,000 | 6,713 | ||||||
Gazprom OJSC 7.288% 20375 | 4,650 | 5,202 | ||||||
StatoilHydro ASA 3.875% 2014 | 10,000 | 10,786 | ||||||
Statoil ASA 3.125% 2017 | 10,000 | 10,553 | ||||||
StatoilHydro ASA 5.25% 2019 | 2,000 | 2,274 | ||||||
Enbridge Inc. 5.60% 2017 | 20,067 | 23,099 | ||||||
Arch Coal, Inc. 7.00% 20195 | 21,350 | 22,471 | ||||||
Spectra Energy Partners, LP 2.95% 2016 | 3,750 | 3,816 | ||||||
Spectra Energy Partners 4.60% 2021 | 15,730 | 16,172 | ||||||
Woodside Finance Ltd. 4.60% 20215 | 17,685 | 17,951 | ||||||
Alpha Natural Resources, Inc. 6.00% 2019 | 11,125 | 11,528 | ||||||
Alpha Natural Resources, Inc. 6.25% 2021 | 5,600 | 5,824 | ||||||
Husky Energy Inc. 5.90% 2014 | 5,000 | 5,601 | ||||||
Husky Energy Inc. 7.25% 2019 | 2,655 | 3,274 | ||||||
Husky Energy Inc. 6.80% 2037 | 5,675 | 6,663 | ||||||
Total Capital SA 3.00% 2015 | 11,500 | 12,184 | ||||||
Total Capital SA 3.125% 2015 | 1,200 | 1,275 | ||||||
Total Capital SA 4.45% 2020 | 1,000 | 1,087 | ||||||
Cenovus Energy Inc. 4.50% 2014 | 12,000 | 13,156 | ||||||
Laredo Petroleum, Inc. 9.50% 20195 | 10,850 | 11,582 | ||||||
Williams Companies, Inc. 8.75% 2032 | 7,799 | 10,269 | ||||||
Energy Transfer Partners, LP 7.50% 2020 | 9,500 | 10,213 | ||||||
Odebrecht Drilling Norbe VIII/IX Ltd 6.35% 20215,6 | 8,660 | 9,223 | ||||||
Canadian Natural Resources Ltd. 5.70% 2017 | 7,350 | 8,590 | ||||||
Pemex Project Funding Master Trust 5.75% 2018 | 4,500 | 5,020 | ||||||
Pemex Project Funding Master Trust 6.50% 20415 | 2,125 | 2,259 | ||||||
BG Energy Capital PLC 2.50% 20155 | 7,000 | 7,197 | ||||||
Chevron Corp. 3.95% 2014 | 500 | 541 | ||||||
Chevron Corp. 4.95% 2019 | 4,550 | 5,221 | ||||||
General Maritime Corp. 12.00% 2017 | 8,500 | 5,525 | ||||||
Reliance Holdings Ltd. 4.50% 20205 | 1,260 | 1,209 | ||||||
Reliance Holdings Ltd. 6.25% 20405 | 2,250 | 2,208 | ||||||
PTT Exploration & Production Ltd 5.692% 20215 | 2,830 | 2,955 | ||||||
XTO Energy Inc. 5.50% 2018 | 2,500 | 2,942 | ||||||
Petrobras International 5.375% 2021 | 2,500 | 2,675 | ||||||
Devon Financing Corp. ULC 7.875% 2031 | 1,250 | 1,657 | ||||||
891,235 | ||||||||
CONSUMER STAPLES — 1.06% | ||||||||
Altria Group, Inc. 9.70% 2018 | 18,000 | 24,295 | ||||||
Altria Group, Inc. 9.25% 2019 | 54,890 | 73,363 | ||||||
Altria Group, Inc. 9.95% 2038 | 23,500 | 34,429 | ||||||
Anheuser-Busch InBev NV 2.50% 2013 | 5,000 | 5,136 | ||||||
Anheuser-Busch InBev NV 0.609% 20147 | 17,795 | 17,868 | ||||||
Anheuser-Busch InBev NV 3.625% 2015 | 23,500 | 25,341 | ||||||
Anheuser-Busch InBev NV 4.125% 2015 | 14,950 | 16,294 | ||||||
Anheuser-Busch InBev NV 7.75% 2019 | 25,000 | 32,626 | ||||||
Anheuser-Busch InBev NV 5.375% 2020 | 4,950 | 5,703 | ||||||
SUPERVALU INC. 7.50% 2012 | 3,323 | 3,468 | ||||||
Albertson’s, Inc. 7.25% 2013 | 14,122 | 14,652 | ||||||
SUPERVALU INC. 7.50% 2014 | 11,000 | 11,261 | ||||||
SUPERVALU INC. 8.00% 2016 | 38,335 | 39,964 | ||||||
Albertson’s, Inc. 7.45% 2029 | 2,000 | 1,670 | ||||||
Albertson’s, Inc. 8.00% 2031 | 7,205 | 6,250 | ||||||
PepsiCo, Inc. 3.10% 2015 | 15,000 | 15,921 | ||||||
PepsiCo, Inc. 2.50% 2016 | 12,000 | 12,364 | ||||||
PepsiCo, Inc. 7.90% 2018 | 15,000 | 19,778 | ||||||
PepsiCo, Inc. 4.875% 2040 | 2,000 | 2,048 | ||||||
Rite Aid Corp. 9.75% 2016 | 10,000 | 11,125 | ||||||
Rite Aid Corp. 10.375% 2016 | 2,125 | 2,295 | ||||||
Rite Aid Corp. 10.25% 2019 | 13,790 | 15,376 | ||||||
Rite Aid Corp. 8.00% 2020 | 11,450 | 12,738 | ||||||
Wal-Mart Stores, Inc. 2.875% 2015 | 15,000 | 15,836 | ||||||
Wal-Mart Stores, Inc. 2.80% 2016 | 10,000 | 10,605 | ||||||
Wal-Mart Stores, Inc. 3.25% 2020 | 10,010 | 10,051 | ||||||
Wal-Mart Stores, Inc. 4.875% 2040 | 3,000 | 2,992 | ||||||
Stater Bros. Holdings Inc. 7.75% 2015 | 19,250 | 20,092 | ||||||
Stater Bros. Holdings Inc. 7.375% 20185 | 8,575 | 8,950 | ||||||
Constellation Brands, Inc. 8.375% 2014 | 3,675 | 4,235 | ||||||
Constellation Brands, Inc. 7.25% 2017 | 21,000 | 23,100 | ||||||
Wesfarmers Ltd. 6.998% 20135 | 25,000 | 27,243 | ||||||
Coca-Cola Co. 1.50% 2015 | 15,000 | 15,085 | ||||||
Coca-Cola Co. 3.15% 2020 | 6,700 | 6,658 | ||||||
Tyson Foods, Inc. 10.50% 2014 | 6,050 | 7,245 | ||||||
Tyson Foods, Inc. 6.85% 20167 | 11,500 | 12,866 | ||||||
Delhaize Group 6.50% 2017 | 3,850 | 4,544 | ||||||
Delhaize Group 5.70% 2040 | 15,691 | 15,509 | ||||||
Unilever Capital Corp. 3.65% 2014 | 17,500 | 18,737 | ||||||
Procter & Gamble Co. 3.50% 2015 | 17,250 | 18,636 | ||||||
General Mills, Inc. 0.611% 20147 | 18,500 | 18,562 | ||||||
Kroger Co. 6.40% 2017 | 8,250 | 9,887 | ||||||
Kroger Co. 6.80% 2018 | 4,045 | 4,911 | ||||||
Diageo Capital PLC 5.50% 2016 | 11,161 | 12,846 | ||||||
British American Tobacco International Finance PLC 9.50% 20185 | 8,705 | 11,784 | ||||||
Kimberly-Clark Corp. 7.50% 2018 | 9,000 | 11,600 | ||||||
Tesco PLC 5.50% 20175 | 9,000 | 10,384 | ||||||
Safeway Inc. 5.00% 2019 | 3,000 | 3,230 | ||||||
Safeway Inc. 3.95% 2020 | 5,310 | 5,351 | ||||||
Smithfield Foods, Inc., Series B, 7.75% 2013 | 1,495 | 1,630 | ||||||
Smithfield Foods, Inc. 10.00% 2014 | 2,696 | 3,164 | ||||||
Spectrum Brands Inc. 9.50% 2018 | 3,000 | 3,353 | ||||||
TreeHouse Foods, Inc. 7.75% 2018 | 3,100 | 3,321 | ||||||
726,372 | ||||||||
UTILITIES — 0.85% | ||||||||
Edison Mission Energy 7.50% 2013 | 32,525 | 32,688 | ||||||
Edison Mission Energy 7.75% 2016 | 35,300 | 30,711 | ||||||
Midwest Generation, LLC, Series B, 8.56% 20166 | 12,995 | 13,450 | ||||||
Edison Mission Energy 7.00% 2017 | 19,525 | 14,937 | ||||||
Edison Mission Energy 7.20% 2019 | 39,450 | 29,883 | ||||||
Homer City Funding LLC 8.734% 20266 | 11,917 | 10,979 | ||||||
Edison Mission Energy 7.625% 2027 | 20,850 | 14,491 | ||||||
Nevada Power Co., General and Refunding Mortgage Notes, Series L, 5.875% 2015 | 1,675 | 1,903 | ||||||
Nevada Power Co., General and Refunding Mortgage Notes, Series M, 5.95% 2016 | 13,700 | 15,843 | ||||||
Sierra Pacific Resources 6.75% 2017 | 30,555 | 31,561 | ||||||
NV Energy, Inc 6.25% 2020 | 17,500 | 18,921 | ||||||
TXU, Term Loan, 4.768% 20176,7,8 | 51,017 | 38,171 | ||||||
Texas Competitive Electric Holdings Co. LLC, 11.50% 20205 | 18,810 | 17,493 | ||||||
Consumers Energy Co., First Mortgage Bonds, 6.70% 2019 | 26,800 | 32,966 | ||||||
CMS Energy Corp. 6.25% 2020 | 20,000 | 21,924 | ||||||
MidAmerican Energy Co. 5.95% 2017 | 10,625 | 12,535 | ||||||
PacifiCorp., First Mortgage Bonds, 5.65% 2018 | 5,500 | 6,416 | ||||||
MidAmerican Energy Holdings Co. 5.75% 2018 | 10,000 | 11,533 | ||||||
MidAmerican Energy Holdings Co. 5.95% 2037 | 3,375 | 3,736 | ||||||
AES Corp. 7.75% 2015 | 10,000 | 10,850 | ||||||
AES Corp. 8.00% 2017 | 4,000 | 4,340 | ||||||
AES Corp. 8.00% 2020 | 7,000 | 7,595 | ||||||
AES Corp. 7.375% 20215 | 10,125 | 10,492 | ||||||
Electricité de France SA 5.50% 20145 | 15,000 | 16,542 | ||||||
Electricité de France SA 6.95% 20395 | 8,000 | 9,829 | ||||||
Israel Electric Corp. Ltd. 9.375% 20205 | 16,215 | 20,142 | ||||||
Israel Electric Corp. Ltd. 8.10% 20965 | 4,905 | 4,884 | ||||||
NRG Energy, Inc. 7.375% 2017 | 14,400 | 15,138 | ||||||
NRG Energy, Inc. 8.25% 2020 | 3,850 | 3,985 | ||||||
Intergen Power 9.00% 20175 | 16,000 | 16,960 | ||||||
CenterPoint Energy Resources Corp. 4.50% 20215 | 16,130 | 16,723 | ||||||
National Rural Utilities Cooperative Finance Corp. 5.50% 2013 | 13,850 | 15,088 | ||||||
E.ON International Finance BV 5.80% 20185 | 13,000 | 14,866 | ||||||
Allegheny Energy Supply Co., LLC 8.25% 20125 | 13,835 | 14,525 | ||||||
Virginia Electric and Power Co., Series 2003-A, 4.75% 2013 | 6,000 | 6,368 | ||||||
Virginia Electric and Power Co., Series B, 5.95% 2017 | 4,500 | 5,344 | ||||||
Eskom Holdings Ltd. 5.75% 20215 | 6,820 | 7,246 | ||||||
Carolina Power & Light Co. d/b/a Progress Energy Carolinas, Inc. 5.25% 2015 | 6,000 | 6,892 | ||||||
Teco Finance, Inc. 5.15% 2020 | 5,000 | 5,443 | ||||||
Xcel Energy Inc. 4.70% 2020 | 5,000 | 5,400 | ||||||
AES Panamá, SA 6.35% 20165 | 4,500 | 4,894 | ||||||
Abu Dhabi National Energy Co. PJSC (TAQA) 6.165% 20175 | 4,000 | 4,400 | ||||||
588,087 | ||||||||
MATERIALS — 0.84% | ||||||||
Reynolds Group 8.50% 20165 | 15,652 | 16,396 | ||||||
Reynolds Group 8.75% 20185 | 21,400 | 20,651 | ||||||
Reynolds Group 7.125% 20195 | 14,350 | 14,027 | ||||||
Reynolds Group 7.875% 20195 | 29,300 | 29,776 | ||||||
Reynolds Group 9.00% 20195 | 2,100 | 2,100 | ||||||
Reynolds Group 9.875% 20195 | 19,075 | 19,290 | ||||||
Georgia Gulf Corp. 10.75% 2016 | 3,385 | 3,639 | ||||||
Georgia Gulf Corp. 9.00% 20175 | 54,565 | 59,476 | ||||||
ArcelorMittal 3.75% 2015 | 10,000 | 10,387 | ||||||
ArcelorMittal 3.75% 2016 | 6,190 | 6,378 | ||||||
ArcelorMittal 5.50% 2021 | 20,000 | 20,526 | ||||||
ArcelorMittal 6.75% 2041 | 15,000 | 15,385 | ||||||
International Paper Co. 7.40% 2014 | 12,500 | 14,373 | ||||||
International Paper Co. 7.95% 2018 | 22,545 | 27,756 | ||||||
International Paper Co. 7.30% 2039 | 5,615 | 6,473 | ||||||
Dow Chemical Co. 7.60% 2014 | 30,450 | 35,517 | ||||||
E.I. du Pont de Nemours and Co. 0.667% 20147 | 35,000 | 35,224 | ||||||
Nalco Co. 8.25% 2017 | 17,485 | 19,758 | ||||||
Nalco Co. 6.625% 20195 | 12,985 | 14,641 | ||||||
Ball Corp. 7.125% 2016 | 12,700 | 13,986 | ||||||
Ball Corp. 6.75% 2020 | 9,550 | 10,266 | ||||||
Ball Corp. 5.75% 2021 | 8,615 | 8,723 | ||||||
Teck Resources Ltd. 10.75% 2019 | 24,000 | 30,583 | ||||||
Ardagh Packaging Finance 7.375% 20175 | 9,150 | 9,493 | ||||||
Ardagh Packaging Finance 11.125% 20185,11 | 7,915 | 7,964 | ||||||
Ardagh Packaging Finance 9.125% 20205 | 8,490 | 8,999 | ||||||
Graphic Packaging International, Inc. 9.50% 2017 | 13,150 | 14,629 | ||||||
Graphic Packaging International, Inc. 7.875% 2018 | 1,500 | 1,635 | ||||||
Newpage Corp. 11.375% 2014 | 16,825 | 15,227 | ||||||
BHP Billiton Finance (USA) Ltd. 5.50% 2014 | 11,730 | 13,170 | ||||||
Owens-Brockway Glass Container Inc. 7.375% 2016 | 10,000 | 10,975 | ||||||
MacDermid 9.50% 20175 | 9,015 | 9,533 | ||||||
LBI Escrow Corp 8.00% 20175 | 7,659 | 8,693 | ||||||
Anglo American Capital PLC 2.15% 20135 | 8,015 | 8,133 | ||||||
Smurfit Capital Funding PLC 7.50% 2025 | 7,125 | 6,947 | ||||||
Freeport-McMoRan Copper & Gold Inc. 8.375% 2017 | 5,350 | 5,852 | ||||||
Packaging Dynamics Corp. 8.75% 20165 | 5,335 | 5,522 | ||||||
OMNOVA Solutions Inc. 7.875% 20185 | 4,000 | 3,910 | ||||||
Arbermarle Corp. 5.10% 2015 | 2,570 | 2,819 | ||||||
Rockwood Specialties Group, Inc. 7.50% 2014 | 2,065 | 2,122 | ||||||
Solutia Inc. 8.75% 2017 | 1,680 | 1,873 | ||||||
Airgas, Inc. 7.125% 2018 | 1,250 | 1,353 | ||||||
Praxair, Inc. 4.375% 2014 | 1,000 | 1,085 | ||||||
CEMEX SA 9.25% 20205 | 979 | 908 | ||||||
CRH America, Inc. 8.125% 2018 | 500 | 600 | ||||||
576,773 | ||||||||
BONDS & NOTES OF GOVERNMENTS & GOVERNMENT AGENCIES OUTSIDE THE U.S. — 0.20% | ||||||||
Hungarian Government 6.25% 2020 | 21,310 | 22,376 | ||||||
Hungarian Government 7.625% 2041 | 2,830 | 3,032 | ||||||
Croatian Government 6.75% 20195 | 14,000 | 14,807 | ||||||
Croatian Government 6.75% 2019 | 5,500 | 5,817 | ||||||
Croatian Government 6.625% 20205 | 2,000 | 2,083 | ||||||
Croatian Government 6.375% 20215 | 1,175 | 1,193 | ||||||
Polish Government 5.25% 2014 | 1,500 | 1,627 | ||||||
Polish Government 6.375% 2019 | 18,985 | 21,690 | ||||||
Russian Federation 7.50% 20306 | 12,344 | 14,789 | ||||||
France Government Agency-Guaranteed, Société Finance 2.875% 20145 | 10,000 | 10,538 | ||||||
Province of Ontario, Series 1, 1.875% 2012 | 10,000 | 10,190 | ||||||
South Africa (Republic of) 6.875% 2019 | 2,050 | 2,478 | ||||||
South Africa (Republic of) 5.50% 2020 | 3,200 | 3,548 | ||||||
South Africa (Republic of) 6.25% 2041 | 3,715 | 4,096 | ||||||
Brazil (Federal Republic of) Global 6.00% 2017 | 4,200 | 4,937 | ||||||
Brazil (Federal Republic of) Global 7.125% 2037 | 2,000 | 2,575 | ||||||
State of Qatar 9.75% 2030 | 4,000 | 6,140 | ||||||
United Mexican States Government Global, Series A, 6.75% 2034 | 3,990 | 4,818 | ||||||
136,734 | ||||||||
ASSET-BACKED OBLIGATIONS6 — 0.16% | ||||||||
AmeriCredit Automobile Receivables Trust, Series 2007-D-F, Class A-4-A, FSA insured, 5.56% 2014 | 4,002 | 4,135 | ||||||
AmeriCredit Automobile Receivables Trust, Series 2008-A-F, Class A-4, FSA insured, 6.96% 2014 | 14,478 | 15,157 | ||||||
Chase Issuance Trust, Series 2008-4, Class A, 4.65% 2015 | 10,000 | 10,642 | ||||||
AEP Texas Central Transitioning Funding II LLC, Secured Transition Bonds, Series A, Class A-3, 5.09% 2017 | 8,265 | 9,179 | ||||||
PG&E Energy Recovery Funding LLC, Series 2005-2, Class A-3, 5.12% 2014 | 8,040 | 8,410 | ||||||
First Horizon ABS Trust, Series 2006-HE2, Class A, FSA insured, 0.317% 20267 | 3,353 | 2,653 | ||||||
First Horizon ABS Trust, Series 2007-HE1, Class A, FSA insured, 0.317% 20297 | 7,067 | 5,473 | ||||||
J.P. Morgan Mortgage Acquisition Corp., Series 2005-FRE1, Class A-F-4, 3.106% 20357 | 8,237 | 7,988 | ||||||
Home Equity Asset Trust, Series 2004-7, Class M-1, 1.117% 20357 | 10,000 | 7,792 | ||||||
CPS Auto Receivables Trust, Series 2006-C, Class A-4, XLCA insured, 5.14% 20135 | 2,022 | 2,063 | ||||||
CPS Auto Receivables Trust, Series 2007-B, Class A-4, FSA insured, 5.60% 20145 | 4,567 | 4,614 | ||||||
Countryplace Manufactured Housing Contract, Series 2005-1, Class A-3, AMBAC insured, 4.80% 20355 | 4,422 | 4,206 | ||||||
Countryplace Manufactured Housing Contract, Series 2005-1, Class A-4, AMBAC insured, 5.20% 20355,7 | 1,145 | 1,021 | ||||||
RAMP Trust, Series 2003-RZ4, Class A-7, 4.79% 20337 | 3,455 | 3,510 | ||||||
Aesop Funding II LLC, Series 2010-3A, Class B, 6.74% 20165 | 3,000 | 3,427 | ||||||
Long Beach Acceptance Auto Receivables Trust, Series 2006-B, Class A-4, FSA insured, 5.18% 2013 | 3,303 | 3,308 | ||||||
Citibank Credit Card Issuance Trust, Series 2008, Class A5, 4.85% 2015 | 3,000 | 3,214 | ||||||
Conseco Finance Home Loan Trust, Series 1999-G, Class B-2, 10.96% 2029 | 13,640 | 3,085 | ||||||
Ameriquest Mortgage Securities Inc., Series 2003-12, Class M-1, 1.312% 20347 | 3,634 | 2,988 | ||||||
CWHEQ Revolving Home Equity Loan Trust, Series 2006-I, Class 2-A, FSA insured, 0.327% 20377 | 3,466 | 2,629 | ||||||
SACO I Trust, Series 2006-12, Class I-A, 0.327% 20367 | 6,060 | 2,058 | ||||||
Home Equity Mortgage Trust, Series 2006-6, Class 2A-1, 0.287% 20377 | 15,143 | 1,116 | ||||||
Vanderbilt Mortgage and Finance, Inc., Series 1999-B, Class I-A-6, 6.925% 2024 | 778 | 779 | ||||||
Residential Asset Securities Corp. Trust, Series 2003-KS6, Class A-2, 0.787% 20337 | 92 | 76 | ||||||
109,523 | ||||||||
MUNICIPALS — 0.05% | ||||||||
State of California, Various Purpose General Obligation Bonds (Federally Taxable), 6.20% 2019 | 24,675 | 27,755 | ||||||
State of New Jersey, Economic Development Authority, Energy Facility Revenue Bonds (ACR Energy Partners, LLC Project), | ||||||||
Series 2011-B, 12.00% 20305 | 7,500 | 7,671 | ||||||
State of South Dakota, Educational Enhancement Funding Corp., Tobacco Settlement Asset-backed Bonds, | ||||||||
Series 2002-A, Class A, 6.72% 2025 | 2,322 | 2,171 | ||||||
37,597 | ||||||||
MISCELLANEOUS — 0.01% | ||||||||
Other bonds & notes in initial period of acquisition | 7,232 | |||||||
Total bonds & notes (cost: $19,994,090,000) | 21,000,267 | |||||||
Short-term securities — 4.59% | ||||||||
Fannie Mae 0.09%–0.23% due 8/1/2011–5/1/2012 | 880,275 | 879,520 | ||||||
Freddie Mac 0.11%–0.301% due 8/3/2011–5/30/2012 | 733,405 | 732,864 | ||||||
Coca-Cola Co. 0.09%–0.16% due 8/22–9/23/20115 | 281,200 | 281,172 | ||||||
U.S. Treasury Bills 0.158%–0.242% due 8/25/2011–1/12/2012 | 220,210 | 220,122 | ||||||
CAFCO, LLC 0.15%–0.18% due 9/19–10/6/2011 | 138,000 | 137,972 | ||||||
Ciesco LLC 0.13%–0.14% due 8/19–8/30/2011 | 71,200 | 71,195 | ||||||
Federal Home Loan Bank 0.17%–0.301% due 11/14–12/5/2011 | 166,180 | 166,112 | ||||||
Falcon Asset Securitization Co., LLC 0.13% due 8/10/20115 | 100,000 | 99,996 | ||||||
JPMorgan Chase & Co. 0.15% due 9/6/2011 | 64,600 | 64,585 | ||||||
Straight-A Funding LLC 0.16%–0.17% due 8/4–10/5/20115 | 112,041 | 112,014 | ||||||
Merck & Co. Inc. 0.10% due 9/8/20115 | 72,300 | 72,294 | ||||||
Federal Farm Credit Banks 0.19%–0.21% due 9/8–9/13/2011 | 52,800 | 52,797 | ||||||
Private Export Funding Corp. 0.22% due 11/2/20115 | 48,800 | 48,779 | ||||||
Medtronic Inc. 0.12%–0.18% due 8/25–10/6/20115 | 48,500 | 48,495 | ||||||
Abbott Laboratories 0.13% due 8/22/20115 | 40,000 | 39,998 | ||||||
John Deere Credit Ltd. 0.10% due 8/9/20115 | 39,000 | 38,999 | ||||||
Johnson & Johnson 0.20% due 8/29/20115 | 37,600 | 37,598 | ||||||
Wal-Mart Stores, Inc. 0.06% due 8/2/20115 | 24,400 | 24,400 | ||||||
IBM Corp. 0.06% due 8/8/20115 | 22,100 | 22,100 | ||||||
Procter & Gamble Co. 0.17% due 1/5/20125 | 8,500 | 8,494 | ||||||
Total short-term securities (cost: $3,159,430,000) | 3,159,506 | |||||||
Total investment securities (cost: $63,842,838,000) | 68,801,838 | |||||||
Other assets less liabilities | 72,652 | |||||||
Net assets | $ | 68,874,490 |
As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.
1Represents an affiliated company as defined under the Investment Company Act of 1940. |
2Security did not produce income during the last 12 months. |
3Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Miscellaneous,” was $217,082,000, which represented .32% of the net assets of the fund. |
4Acquired in a transaction exempt from registration under the Securities Act of 1933. May be subject to legal or contractual restrictions on resale. Further details on these holdings appear below. |
Percent | |||||||||||||
Acquisition | Cost | Value | of net | ||||||||||
date | (000 | ) | (000 | ) | assets | ||||||||
NXP BV and NXP Funding LLC 10.00% 2013 | 7/17/2009 | $ | 32,892 | $ | 42,908 | .06 | % | ||||||
Atrium Corp. | 4/30/2010 | 163 | 163 | .00 | |||||||||
Total restricted securities | $ | 33,055 | $ | 43,071 | .06 | % |
5Acquired in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $5,835,207,000, which represented 8.47% of the net assets of the fund. |
6Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. |
7Coupon rate may change periodically. |
8Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans was $1,375,946,000, which represented 2.00% of the net assets of the fund. |
9Scheduled interest and/or principal payment was not received. |
10Step bond; coupon rate will increase at a later date. |
11Payment in kind; the issuer has the option of paying additional securities in lieu of cash. |
12Index-linked bond whose principal amount moves with a government price index. |
Key to abbreviation
ADR = American Depositary Receipts
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the fund’s prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.
MFGEFP-906-0911O-S29400
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INVESTMENT PORTFOLIO
To the Shareholders and Board of Trustees of
The Income Fund of America:
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements of The Income Fund of America (the “Fund”) as of July 31, 2011, and for the year then ended and have issued our report thereon dated September 7, 2011, which report and financial statements are included in Item 1 of this Certified Shareholder Report on Form N-CSR. Our audit also included the Fund’s investment portfolio (the “Schedule”) as of July 31, 2011, appearing in Item 6 of this Form N-CSR. This Schedule is the responsibility of the Fund’s management. Our responsibility is to express an opinion based on our audit. In our opinion, the Schedule referred to above, when considered in relation to the basic financial statements taken as a whole of the Fund referred to above, presents fairly, in all material respects, the information set forth therein.
DELOITTE & TOUCHE LLP
Costa Mesa, California
September 7, 2011
ITEM 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 8 – Portfolio Managers of Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 10 – Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of trustees since the Registrant last submitted a proxy statement to its shareholders. The procedures are as follows. The Registrant has a nominating and governance committee comprised solely of persons who are not considered ‘‘interested persons’’ of the Registrant within the meaning of the Investment Company Act of 1940, as amended. The committee periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of trustees. While the committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the board. Such suggestions must be sent in writing to the nominating and governance committee of the Registrant, c/o the Registrant’s Secretary, and must be accompanied by complete biographical and occupational data on the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the nominating and governance committee.
ITEM 11 – Controls and Procedures
(a) | The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule. |
(b) | There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
ITEM 12 – Exhibits
(a)(1) | The Code of Ethics that is the subject of the disclosure required by Item 2 is attached as an exhibit hereto. |
(a)(2) | The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE INCOME FUND OF AMERICA | |
By /s/ Hilda L. Applbaum | |
Hilda L. Applbaum, Vice Chairman and Principal Executive Officer | |
Date: September 30, 2011 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By /s/ Hilda L. Applbaum |
Hilda L. Applbaum, Vice Chairman and Principal Executive Officer |
Date: September 30, 2011 |
By /s/ Jeffrey P. Regal |
Jeffrey P. Regal, Treasurer and Principal Financial Officer |
Date: September 30, 2011 |